Assalamualaikum Warahmatullahi Wabarakatuh
Yang Berbahagia Tan Sri Jawhar Hassan
Chairman, The New Straits Times Press (Malaysia) Berhad
Yang Berbahagia Dato’ Sri Abdul Wahid Omar
President and Chief Executive Officer of Maybank
Yang Berbahagia Dato’ Anthony Bujang
Chief Executive Officer The New Straits Times Press (Malaysia) Berhad
Mr Kula Kulendran
Executive Vice President
Head of Global Network Services, Japan, Asia Pacific, and Australia of American Express
Yang Berbahagia Datuk Azman Mohd Zain
Chief Judge, Malaysia’s CEO of The Year 2009 Award
Ladies and gentlemen,
1. Thank you for inviting me to this event, which brings together some of the most distinguished business leaders in the country. I am delighted to be here tonight to honour the top corporate leader for the year 2009. The award carries with it a distinguished heritage that has seen the most deserving and exceptional corporate leaders being bestowed the title since 1994. These leaders are the crème de la crème of corporate Malaysia, and tonight, one more will join their ranks.
2. I am pleased that this year the organisers have gone a step further to introduce the “Corporate Nationhood Initiatives Award”, which recognises and honours organisations that undertake projects to promote national unity and nation building as part of their corporate agenda.
3. By championing the core values and aspirations embedded in the 1Malaysia concept, the Corporate Nationhood Initiatives Award will engage and encourage corporate Malaysia to be an integral part of the mission to make Malaysia more united, peaceful and prosperous.
4. Active participation of the corporate sector is crucial for the success of 1Malaysia. I am sure you will all agree that the values and aspirations that 1Malaysia espouses, such as the culture of excellence, innovation, knowledge and high performance, social justice and boldness in prospecting for new opportunities, are qualities essential for a dynamic and prosperous private sector.
Ladies and gentlemen,
5. We are just emerging from a global recession. As the World Bank points out in its latest assessment of the prospects for 2010, it will continue to be a challenging year despite the recovery. But Malaysia has turned the corner and we are back on the road of economic growth. I am determined to ensure that growth gathers momentum and remains robust and sustainable despite continuing challenges to the global economy.
6. The task ahead is enormous for Malaysia. To achieve sustainable growth and reach new heights of prosperity and social well-being, there needs to be fundamental, indeed systemic, change. We must transform the Malaysian economy into one that is highly competitive, knowledge- and technology-rich that is driven by ideas, innovation and talent.
7. Today’s interconnected world demands a vision, decision making and implementation and execution of plans that is vastly different from the past. To keep pace with rapid changes, Malaysian management must not be locked into command-control practices that are averse to, and, indeed, avoid, change.
8. We live in a global and network age that pushes for rapid integration through communication. It is imperative to understand that this increase in inter-connectedness naturally leads to an increase in competitiveness. To compete in such an environment, there must be free flow of information and ideas. The Malaysian corporate management must work towards this ideal. The management style will have to change so that Malaysian companies are not left out and must be competitive on a global scale.
9. Management practices in the past placed great stress on top-down decision-making structures and integrated chains of command. This had its advantages but also created a one-way communication flow with little room for flexibility and change. East Asian modes of management are, of course, highly structured. In recognizing the downsides, efforts are needed to increase not only management but worker participation at all levels.
Ladies and gentlemen,
10. The ills of global financial capitalism and the inadequacy of corporate governance systems have been exposed by the recent crisis. Global financial capitalism underlines one of the primary disadvantages of globalization — the unfettered sacrifice of prudence for profits. The 2008 global financial crisis revealed the inadequacy of corporate governance systems of financial institutions. While there are now efforts to reintroduce stricter regulation, this must be complemented by shrewd and careful management of resources. Management should reward the right kind of risk-taking and one that is associated with core business activities which do not endanger the overall viability of the enterprise.
11. In the struggle between ‘Wall Street’ and ‘Main Street” it is the former that usually wins. Instead of functioning as stable intermediaries between savers and borrowers, financial institutions have, in the pursuit of profits and huge compensation, taken it upon themselves not only to mitigate but also to take on and absorb risk. When the huge bets that they place turn sour, governments had no option but to bail them out because they were ‘too big to fail’. The resources expanded for such ‘bail outs’ are at the expense of the present and future generations.
12. Equally important is the need to avoid the perils of short-term outlook. This refers to the practice of reaping large short-term profits against sustainable returns over the long term. The objective must be sustained shareholder value over the longer term and not just quarterly results. The focus on short-term not only promotes impatience but also a lack of focus on producing generic quality products and services since management has to deliver instant results.
13. A large part of the reason for this is that executive performance and compensation are measured in terms of months rather than years. This is not conducive to pursuing corporate growth. Moreover, it encourages high turnover and low long-term commitment among executives. The practice of measuring performance according to key benchmark and performance indicators is essential in today’s business environment. It is imperative, however, that these do not end up perversely damaging corporations instead of strengthening them.
14. I am confident in the ability of our corporate leaders to spearhead recovery and be the vanguard of change. I am pleased to note that 19 Malaysian companies made the Forbes Global 2000 list last year. I look forward to many more this year and in the years to come as we continue to strive for excellence on our journey to becoming a fully developed, united, prosperous and competitive nation.
15. I would like to conclude by offering my congratulations to Malaysia’s CEO of the Year 2009.