@ the IERP® Global Conference, August 2023
Annabella Subashini, Head of Compliance, Integrity and Ethics, Axiata Group Berhad, went straight to the key issues challenging not just businesses but the world, in her presentation on upholding transparency. She pointed out that the world was at an extraordinary inflexion point of multiple crises; corruption exacerbates these crises, erodes public trust, and diverts funds from where they are most needed. How can businesses, government and civil society enjoin their efforts to counter these ills? She used the Russia-Ukraine war as an example of how the global economy is impacted; telecommunications could be affected by war because of the roaming function, she pointed out.
“Even financial institutions are now querying if companies are being affected by sanctions brought about by the war,” she said. “With the US and China, sanctions on microchips have impacted the telecommunications business, directly and indirectly. Sri Lanka is in an economic crisis. Businesses are affected if they have subsidiaries there. India has decided to ban exports of rice and wheat. This could lead to price fluctuations and instability as people scramble for these goods. But how is all this tied to corruption? When these things happen, corruption seeps in.” Statistics show that corruption is the single biggest issue facing society today.
It comes in a myriad of forms, including sponsorships, donations and even community investment. Inflated payments may hide bribes or kickbacks. Organisations may be used as a ‘front’ for soliciting donations or sponsorships, which may be a route for channelling bribes. A sponsorship or donation may be made with the aim of benefiting or influencing a decision-maker concerning a contract, or other matters of importance to the company. During the pandemic, and even post-pandemic, the biggest fear of people trying to help others and ease dire situations, was whether their donations would reach the people who most needed their help, she said.
Locally, there have been several examples of funds intended to help the B40 being diverted instead to enrich others, leading to the arrest of several public officials for corruption, in the past two years. How can organisations ensure that transparency is upheld? “We cannot just tick boxes where compliance or risk activities are concerned,” she said. “You cannot just go into a board meeting and tell everyone that these matters need to be taken care of. It is our duty to ensure that we highlight the key risks happening in the company and industry, country and region.” Members of the board need to be told to foresee the things coming their way and decide what they need to do.
She urged risk professionals to manage the risk or suggest what board members should investigate. “We may not have the answers, but board members need to know because they are senior,” she said. “They have the expertise and the industry knowledge to support us, and get what is required from us.” This is particularly important because of changes to legislation, such as the Corporate Liability Principle. Before, only the person giving a bribe to an agent, or the individual agent accepting a bribe, was deemed guilty of the offence. Now, the entity and its fiduciaries – directors, managers, employees, and other agents – could be held responsible for the bribe.
Briefly covering the efforts taken by the government to address this issue, she talked about the establishment of the Malaysian Anti-Corruption Commission (MACC) and its remit, the National Integrity Plan, and the TRUST Principles. With the implementation of Section 17A of the MACC Act 2009, the burden of proof lies on the commercial organisation to prove to the Court that adequate procedures were communicated, implemented and enforced to prevent the commission of acts of corruption. “Companies can be guided by the TRUST principles when drawing up their respective integrity plans,” Annabella said.
These principles include top-level commitment, risk assessment, the undertaking of control measures, systematic review, monitoring & enforcement, and training & communication. Noting the importance of the tone from the top in the development of an appropriate organisational culture of integrity, she said that board members needed to up their game and could do so by having training and awareness sessions on different topics to equip themselves with the right skills and expertise to carry out their duties. “These can be on risk, anti-corruption, bribery, compliance, and key updates on what is happening in the industry,” she said. Key updates on the ESG front should be included.
“Then the tone from the top will be right, and board members will be able to communicate the right things,” she advised. “The messaging from the board will be alive with what is happening within the company and industry. People want to hear what the board and management want to say.” Her advice for risk professionals was to go into board meetings with a prioritised list of issues to present, as the board had limited time. Detailing what activities could be undertaken with each of the TRUST principles, she emphasised that upholding transparency was key when it came to controls for community investments and gave various examples of financial control risks.
These included the unauthorised use of assets or services, or given as bribes; inflated expense claims to facilitate bribery such as the provision of gifts, travel and cash payments; rush orders or emergency measures; and false invoices for services not provided or for non-existent companies. She also suggested other ways of upholding transparency, including the establishment of a Corruption Risk Register, having a Whistleblowing Channel, and compliance monitoring and evaluation. Training and awareness should not be limited to the board and senior management but should be made available to staff at all levels of the organisation.
Advocating the strengthening of the culture of ethics, integrity and compliance within the organisation as “the right thing to do” instead of just compliance with the law, she said that good governance was not the exclusive role of the CEO or the board. “It’s everyone’s obligation,” she stressed. “As individuals, take the responsibility of doing the right thing. To do this, employees must know what is required of them and be equipped with the right skills and knowledge. Always do the right thing, even when no one is watching. It signals to regulators that the company is trying to curb any risk of bribery, corruption or non-compliance.”
