By Danial Dzulkifly
SHAH ALAM, Dec 4 — Conflicts of interest among board members in companies can be minimised or even eliminated through proper vetting and background checks, say integrity experts, who emphasised the need for diverse appointments to avoid complicity and foster impartial decision-making.
Putra Business School Master of Business Administration programme director Ahmed Razman Abdul Latiff stressed the importance of stringent anti-corruption measures and comprehensive screening processes for board members.
“In the context of government-linked companies, these elements are increasingly important, particularly through the implementation of organisational anti-corruption plans.
“Regular corruption risk and governance assessments are essential to identify gaps and improve existing procedures effectively.
“But processes such as background checks on board members are also crucial. This ensures they are genuinely qualified and free from conflicts of interest, especially preventing them from hiring within the same circle of friends,” he said.
Razman added that investing in onboarding programmes is equally important to enhance the capabilities of board members and strengthen governance frameworks.
He made these comments during a forum titled “Conflict of Interest: What Are the Challenges and Roles of Board Members”, held in conjunction with the Menteri Besar Selangor (Incorporated) Corporate Governance Symposium, at Courtyard by Marriott Setia Alam.
Other panellists included Malaysian Anti-Corruption Commission (MACC) Private Sector Integrity head Mohd Hasraff Hashim, and Advicecube Bahrain’s governance and sustainability director R. Geetha.
During the forum, Razman cited a local case where a chief financial officer was pressured into approving a payment despite the absence of an invoice, under duress from a board member and the chief executive officer.
This is despite the organisation being known for having stringent internal controls.
Geetha said conflicts of interest often extend beyond monetary incentives, and involve nuanced personal and professional incentives.
“Conflicts of interest aren’t just about what’s written on paper; they’re more about what happens behind the scene. For example, during board meetings, decisions are often influenced by personal relationships or hidden agendas.
“To truly understand conflicts of interest, we need to look beyond documents and laws and delve into the motivations driving each action,” she said.
Hasraff said while the MACC Act 2009, particularly Section 23, explicitly addresses abuse of power and conflicts of interest, challenges persist in addressing violations stemming from moral and ethical lapses.
“Despite clear legal provisions, violations occur when individuals prioritise personal interests over professional responsibilities.
“For instance, MACC investigations have found board members making decisions influenced by personal relationships, ultimately harming their organisations,” he said.
The symposium held by MBI today is part of the state-owned firm’s efforts to promote and uphold good corporate governance, aligning with Selangor’s goal of achieving sustainable development and ensuring fiscal responsibility across the state.
