Disclosure!
Last week, almost a hundred of us gathered at one of the conference halls at Pan Pacific Hotel in Kuala Lumpur. Most are white haired public company directors and a few ladies. It is not their choice to be there, but they had to because it was a mandatory course they have to attend; otherwise they could not remain and/or be re-appointed as public company directors. They are the 8th batch of more than four thousands public company directors that had to be "educated" on their responsibilities or rather liabilities for holding such privileged posts. This is done to update company director's knowledge of the new listing requirements by Securities Commission. By chance,I happened to be one in the crowd.
While we were having our morning coffee before the session began, a fellow director told me that he would prefer to be at the golf course than attending the lectures. Who wouldn't?I told him to drink more black coffee to stay awake because I anticipate the subject matters will be dry and boring. Later, I was informed by the emcee that a director( in one of the previous batches) had sent his bodyguard to take his place on the second day of the course but was caught even though the bodyguard spoke perfect English! This I read as a reminder to all participants not to pull any similar tricks with KLSE people.
Suprisingly, not many people went to sleep. Either they drank too much coffee or they got scared when they were reminded of their responsibilities and the penalties if they mess up with the new SC rules and guidelines!
On insider trading,the penalty,if found guilty is 10 years imprisonment or RM 1.0 million fine or both! That is scary.It is the penalty if one gets caught doing insider trading of stocks and shares in Malaysia. I believe some of the directors may have committed insiders trading without them knowing or not getting caught; but no one is talking about it.If you happen to be a director of a public listed company, you have to be careful on certain privileged information.
That was one of the messages I got during this week teach-in for directors of public listed companies. According to the organisers(RIIAM), there are 4021 public company directors in Malaysia and all of them have to attend this short course without exception. My kudos to KLSE for having this course in order to create awareness of directors' responsibilties in order to enhance good governance of public companies!
The same principle applies to all organisations; be it a private company,a family, a society, a government department and even a nation. The insiders have access to information not normally available to outsiders. Certain things are not meant for public consumptions. In my view, all of us are insiders ,one way or the other. We are part of a family at least; and we don't go around telling people about our family affairs to others.The same goes with other organisations that we may be a member (or insider) ,be it a government department, a society or a nation. To be safe, just apply the principle of need to know basis!
When the subject of disclosures was brought up by a lecturer, my mind rolled backed to the movie I watched by the same name. Who would forget when Michael Douglas was having some fun ' with his lady boss. The story was about sexual harassement and the defective diskdrive being manufactured in Penang during a corporate takeover some where in corporate America. You can read the story in the book entitled Disclosure by Micheal Cricton.
As an investor and a director of public companies, I do agree that Malaysian PLC's need more tranparency in their operations and corporate exercises. It is for the good of shareholders in the long run and also for the confidence in the securities industry in general. One point to note is that all PLC's have to disclose their P&L every quarter; not to mention any material information that may have perceived or real effect on share prices. This, to me, is similar to a wake -up call every three months to the management and the board of directors!
Similarly,IMHO,the same principle should apply to all organisations,body corporate and government department where their actions or inactions may have effects on the social and economic life of our people. Their dislosures would be in line with our concept of informed and democratic society so that we have a check and balance. Otherwise, as an example,the inefficiency and failures to deliver the projects to the people by a government department will be safely hidden under the cloak of official secret.
In conclusion, I believe we need more disclosures in matters of public interest!
04:06:2001