The Ethical Orientation of The Board of Director of Malaysian Public Listed Companies
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By : Saiful
(Accounting Department of Economic Faculty. The University of Bengkulu)
PIN (National Integrity Plan) blueprint is the first long term strategy that to be introduced an accountable and corrupt-free society and the corruption is the one of the PIN problem. In the private sector contex, NIP focused to enhancing corporate governance and business ethic is the priority for 2008. In one hand, the investors will get their investment with the maximum value added and good ethical companies will will contribute to higer quality in the community. The current investment trend is that the investors will take into account the ethical issues in investment selection process ( Masley. 2000 as cited Van De Velde, vermeir & Corten, 2005).
Van Gils (2005) the person who examined the charecteristics of management and corporate companies fount that the Dutch companies place ethic is one of the key to selecting the new top management team. In other side, Gupta and Sulaiman (1996) found that Malaysian company managers do not conform to principles of morality and ethics. By BIEM’s survey, only 16 % of Malaysian assure management said the truth. They are concerned in making profit for the company and little emphasis on social responsibility. The research of the problem is to investigate what is the ethical orientation of board of directors of Malaysian public listed companies and what factors influence their ethical orientation.
In detail of this study are :
1. To investigate the ethical attitude to board of directors of Malaysian public listed companies.
2. To investigate the relationship between Board of Directors who are Machavellist and Board of Directors who practice Guanxi.
3. To investigate the level of corporate social responsibility activities of the five themes, practiced by Malaysian PLCs.
4. To determine if there is a significant difference between different ethnicity of BODs and their ethical orientations.
5. To determine if there is a significant difference between different religious background of BODs and their ethical orientations.
The National Integrity Plan (PIN) and Institude Integrity Malaysia (IIM) were eslablished in 2004 to enhance ethics and integrity in both public and private sectors.IIM together with NIP hopes to give direction and guidance to various sectors so that they will work cohwsively together to build a united, harmonious, moral and ethical society, raise awrness, commitment and cooperation among all sectors to enhance integrity and nurture the belief that integrity is a way of life (Accountancy, 2006). The PIN manual differencies ethic and integrity in the following manner: Ethics is a set of moral values and principles which form the standards guiding the code of conduct of individuals, organizations and professions. Ethic of individual relate to a set of values that guide the conduct and behavior of individuals, enabling them to differentiate brtween right and wrong, good and bad and between what should and can be done and what should not and can not be done. Ethic of organizations refers to guidelines in conduct of duties of the organization. These include adherence to principles of honesty, competency, trustworthiness, thruthfulness, transparency, accountability, and justice.
The research has found the type of ethical orientations. The types can be examinined by categorizing business acts into :
1. Marchiavellienism
2. Darwinism/objectivism
3. Universality, and
4. Relativism.
Marchiavellienism and Darwinism are includes in self (egoism). Universality and relativism are includes in Society (Utilitarian). When discussing the relationships between organizational leadership, corporate governance and business ethics, minkes, small and Chatterjee (1999) stressed that in completing an unethical action, many people are involved, but most of the times, the “corporation” rather than “Individual” is held responsible.
The sample of this study are Malaysian companies that are listed on the main board of Bursa Malaysia. Only six industries (construction, consumer product, industrial product, plantation, properties, trading and services) were selected as they had the largest number of companies. Finance industry was omitted. Total of the six industries is three hundred and sixty. Stratified proportionate random sampling technique was used.
Based on the research that was researched looked into poor response by experts, one can infer that the state of business ethic and CSR of Malaysian companies is far from satisfactory. This finding does not augur well for a nation that is trying very hard to break into the ranks of developed nation status. The sample size of this study was to small too small because of poor response rate from companies. Owing to the poor response rate, the researcher made efforts by follow up phone calls and hired an agent to collect questionnaires from the companies that had yet to response.
(Accounting Department of Economic Faculty. The University of Bengkulu)
PIN (National Integrity Plan) blueprint is the first long term strategy that to be introduced an accountable and corrupt-free society and the corruption is the one of the PIN problem. In the private sector contex, NIP focused to enhancing corporate governance and business ethic is the priority for 2008. In one hand, the investors will get their investment with the maximum value added and good ethical companies will will contribute to higer quality in the community. The current investment trend is that the investors will take into account the ethical issues in investment selection process ( Masley. 2000 as cited Van De Velde, vermeir & Corten, 2005).
Van Gils (2005) the person who examined the charecteristics of management and corporate companies fount that the Dutch companies place ethic is one of the key to selecting the new top management team. In other side, Gupta and Sulaiman (1996) found that Malaysian company managers do not conform to principles of morality and ethics. By BIEM’s survey, only 16 % of Malaysian assure management said the truth. They are concerned in making profit for the company and little emphasis on social responsibility. The research of the problem is to investigate what is the ethical orientation of board of directors of Malaysian public listed companies and what factors influence their ethical orientation.
In detail of this study are :
1. To investigate the ethical attitude to board of directors of Malaysian public listed companies.
2. To investigate the relationship between Board of Directors who are Machavellist and Board of Directors who practice Guanxi.
3. To investigate the level of corporate social responsibility activities of the five themes, practiced by Malaysian PLCs.
4. To determine if there is a significant difference between different ethnicity of BODs and their ethical orientations.
5. To determine if there is a significant difference between different religious background of BODs and their ethical orientations.
The National Integrity Plan (PIN) and Institude Integrity Malaysia (IIM) were eslablished in 2004 to enhance ethics and integrity in both public and private sectors.IIM together with NIP hopes to give direction and guidance to various sectors so that they will work cohwsively together to build a united, harmonious, moral and ethical society, raise awrness, commitment and cooperation among all sectors to enhance integrity and nurture the belief that integrity is a way of life (Accountancy, 2006). The PIN manual differencies ethic and integrity in the following manner: Ethics is a set of moral values and principles which form the standards guiding the code of conduct of individuals, organizations and professions. Ethic of individual relate to a set of values that guide the conduct and behavior of individuals, enabling them to differentiate brtween right and wrong, good and bad and between what should and can be done and what should not and can not be done. Ethic of organizations refers to guidelines in conduct of duties of the organization. These include adherence to principles of honesty, competency, trustworthiness, thruthfulness, transparency, accountability, and justice.
The research has found the type of ethical orientations. The types can be examinined by categorizing business acts into :
1. Marchiavellienism
2. Darwinism/objectivism
3. Universality, and
4. Relativism.
Marchiavellienism and Darwinism are includes in self (egoism). Universality and relativism are includes in Society (Utilitarian). When discussing the relationships between organizational leadership, corporate governance and business ethics, minkes, small and Chatterjee (1999) stressed that in completing an unethical action, many people are involved, but most of the times, the “corporation” rather than “Individual” is held responsible.
The sample of this study are Malaysian companies that are listed on the main board of Bursa Malaysia. Only six industries (construction, consumer product, industrial product, plantation, properties, trading and services) were selected as they had the largest number of companies. Finance industry was omitted. Total of the six industries is three hundred and sixty. Stratified proportionate random sampling technique was used.
Based on the research that was researched looked into poor response by experts, one can infer that the state of business ethic and CSR of Malaysian companies is far from satisfactory. This finding does not augur well for a nation that is trying very hard to break into the ranks of developed nation status. The sample size of this study was to small too small because of poor response rate from companies. Owing to the poor response rate, the researcher made efforts by follow up phone calls and hired an agent to collect questionnaires from the companies that had yet to response.
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