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International Directors Summit 2017



In August I had the opportunity to participate in the International Directors Summit (IDS) 2017 sponsored by MINDA (Malaysian Directors Academy) and Razak School of Governance (RSOG) held in Kuala Lumpur Malaysia.  The event brought together over 200 directors from across Asia with a theme of “Enhancing Resilience through Governance for Sustainability”, with a real focus on Environment, Society and Governance (ES&G).  The topics were wide ranging from diversity and culture through to the impact of ASEAN community.  Several topics caught my attention, and I thought I would share my insights.

The Three P’s – People, Planet and Profit

Many panels at the summit discussed the role of the board concerning the three Ps.  And while profit is important, people and planet had a significant amount of air time.  In the Asia region, there are many family run enterprises and businesses with one or two majority shareholders.  The importance of creating the right focus around governance in these types of organisations is critical to ensure the appropriate family and shareholder return but also to build a heritage and legacy that is sustainable.  One of the key roles of the non-executive board members is ensuring this balanced agenda.

First Principles

Similar to the three Ps the first principles focus on building the right culture in an organisation, creating and sustaining a culture that all stakeholders can respect.  The first principles are: -

1.  Who are the beneficiaries of what we do as a business?

2.  What difference do we make to their lives?

3.  What value do they place on what we do?

4.  What does it cost us to create this value?

5.  How will we know when we have succeeded?

Five excellent questions that board members can ask to make sure that the strategic direction, risks and actions that a board takes is helping to build the desired culture in the organisation.

Diversity and Inclusion

Similar to other parts of the world, Asian businesses are struggling with achieving the appropriate level of gender diversity on their boards.  The 30% targets is still a way off for most of the Asian countries with   According to the Credit Suisse Research Institute report, CS Gender 3000: The Reward for Change, the percentage of women on boards in Malaysia is approximately 14%, Singapore 10% with Australia around 21% and UK 23%. The highest proportion of women on boards is in Norway where over 46% of all board positions are held by women.  The Asian countries recognise this gap and are focused on increasing the gender diversity on their boards.  In many ways, Asian boards are much more culturally diverse than their European or Australian counter parts, where in Australia less than three percent of board positions are held by someone who does not have an Anglo Saxton or European background.

Value

One of the roles of the board is to protect the value of the business for the shareholders.  In most organisations, only 20% of the value of a business is reflected in core financials.  The other 80% is in things like brand, good will and other more intangibles.  The board needs to make sure that they are looking at all the components of value, not just the financials, to help ensure that the shareholders are getting the appropriate return and that the risks are managed across all areas of the business.  This is a very important point for non-executive directors.  One of the best quotes from the summit was on this topic.  One of the panellist from Khazanah, the strategic investment fund of the Government of Malaysia, which invests in many different businesses similar to a private equity firm said: -

“We do not bulldoze the companies we have major shareholdings unless we see a lot of bull or doze.”

A great quote that many majority shareholders might want to consider.

Overall a very educational and interesting summit and reminded me of the truly diverse nature of Asia and the massive potential to leap frog and take lessons learned North America and Europe in many different areas, including corporate governance.

If you are interested in the total programme for the Summit, please click here.

Written by Mary Sue Rogers

Posted On : 27-08-17

Commented by:  mary sue

Gene - thank you very much for your comment - glad you enjoyed the piece. Cheers

Posted On : 04-09-17

Commented by:  Gene

Thank You for the article... you bring us inside the room to share valuable experiences.. PS loved the piece on Narwhal's!

Posted On : 04-09-17

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