Date: October 13, 2020
Good morning ladies and gentlemen
Welcome to the launch of the Business Integrity 2020 research conducted in collaboration with CGIO of NUS. SIAS is indeed pleased to collaborate with CGIO on this research. While it is not the first of its kind, SIAS is doing so as we are of the opinion that SIAS should extend its review of companies in corporate governance practices.
Many companies see compliance of corporate governance as a set of rules that one must “tick the box”. However, corporate governance is a journey and not a destination. It’s just like an onion, each time you uncover or master one area, there is another waiting around the corner for you. We believe that integrity should be at the heart of everything we do. Otherwise it would put the entire organisation at risk. Many people think nothing of photo-shopping their photos for Instagram to take out blemishes and to look better. An innocent gesture, one might think. However, when a director does not act with integrity, and doctors a picture to change the context, what is the signal for the rest of the staff in the organisation?
Singapore has been consistently rated highly on the global Corruption Perceptions Index (CPI). In 2019 Singapore was ranked 4th. This can be attributed to the very tough stance taken by our founding leaders and specifically the late honourable Mr Lee Kuan Yew, our first Prime Minister. His stance has flowed through too much of the corporate culture today. Corruption erodes the trust we have in the public sector and organisations to act in the best interests of its stakeholders. For countries, it usually involves the misuse of power in the form of money or authority to achieve certain goals in illegal, dishonest, or unfair ways. Corrupted economies are not able to function properly because corruption prevents the natural laws of the economy from functioning freely. As a result, corruption in a nation’s political and economic operations causes its entire society to suffer.
We need not look far for examples of corruption in businesses. The 1Malaysia Development Berhad (1MDB) scandal, crippled the nation’s trust in political leaders and further spurred the campaign for political reformation. Therefore, the impact of corruption is usually felt right across society.
It is for these reasons that SIAS continues to push for greater accountability from companies and to raise their corporate governance standards. Governance is not good governance without integrity!
The Business Integrity report, which we are launching today, is based on Transparency International’s framework. The definitions of business integrity or ethics, comprise of organisational rules, values and norms from individual behaviour, organisational statements, or legal framework that provide guidance and insight into business practices. Business integrity has been an essential element to enhance corporate competitiveness in the current business environment, where greater transparency and stronger sense of corporate responsibility are demanded.
Incidents such as corruption, bribery and fraud generate reputational losses and operational risks, with a high possibility of causing huge economic loss to the companies. Some unethical business scandals may even trigger public distrust or market disruption. In order to mitigate the risks of such misconduct, it is important that companies build their capability to manage and address business ethical issues.
This study aims to establish the baseline for corporate disclosure level on business integrity practices in Southeast Asia by examining the business integrity disclosures from top listed companies in 10 Indonesia, Malaysia, Philippines, Singapore and Thailand. The assessment framework encompasses three areas regarding business ethics, “Internal Commitment to Anticorruption”; “External Commitment to Anti-corruption; and “Reporting and Monitoring”. The report presents some insights on the current level of business integrity disclosures and regulatory framework.
For SIAS, we observe that the findings provide valuable insights to Singapore listed companies and benchmark their disclosures against their peers in the region. Moving forward, these findings will also be used for our SIAS Investors’ Choice Awards.
With the further efforts on developing ethical and accountable business, we look forward to a business environment with greater investor confidence, higher consumer satisfaction and better economic integration in ASEAN.
Without further ado, let me hand over the presentation to Prof Lawrence Loh Director, Centre of Governance, Institution and Organisations, NUS Business School, who will take your through the research findings.
Click here to download the Corporate Disclosures on Business Integrity in ASEAN report.