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Introduction: Genting Malaysia is involved in the hospitality and leisure business, including theme parks, gaming, hotels, seaside resorts and entertainment. The division, Resorts World Genting which consists of family leisure and entertainment resort was voted the World¶s Leading Casino Resort and Asia¶s Leading Casino Resort from 2005 to 2010 by World Travel Awards, it has attracted 19.9 million visitors in year 2010. Genting Malaysia is listed as public listed company in Malaysia, its shares has been listed on the Main Board of Bursa Malaysia since 22 December 1989. Corporate Governance is a set of system that is being used to monitor, guide and control a company¶s business operation as well as any decision making. Genting Malaysia practices good Corporate Governance; the company was awarded in Asia¶s Best Companies 2007-Malaysia ± No.6 in Best Corporate Governance and Corporate Governance Asia Recognition Awards 2008 as Asia¶s Best Companies on Corporate Governance, in year 2008.
1. What is Corporate Governance (CG)?
Corporate Governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as the board, managers, shareholders and other stakeholders, as well as spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance. (OECD, 1999)
Corporate Governance helps in directing, administering or controlling a company. It also manages the relationships with the stakeholders involved;
a. customers. company objectives and monitors the company¶s performance. c. Accountability: Have to confirm the governance roles and responsibilities. transparency. In order to have a good Corporate Governance. Fairness: All shareholders should be treated equally. there are four parts to be taken care of. Ensures the protection of shareholders¶ rights and the enforceability of contracts with service/resource providers. Transparency: There is a need to ensure timely and accurate disclosure for all material matters regarding the corporation. This creates accountability. internal stakeholders including Board of Directors and other employees. y Within charters. performance. governance and ownership. including financial aspects.external stakeholder groups including shareholders. y Document committee charters. . It helps to set the rules and procedures for decision making. the roles and functions of the Board and its committees should be established. d. b. Responsibility: Ensures that corporations follow with relevant laws and regulations that reflect the society¶s value. When documenting a set of corporate governance principles. which are accountability. including minority and foreign shareholders. while supporting voluntary efforts to ensure the alignment of managerial and shareholder interests as well as the monitoring by the Board of Directors capable of objectivity and sound judgment. The following are some simple tips for developing good corporate governance: y Document governance principles. responsibility and fairness. All committee charters should outline a committee¶s authority as to decision making and their roles and responsibilities. a well-defined plan for dealing with governance issues and resolution of issues should be communicated. creditors and suppliers.
2011) y . y The corporate governance committee should make recommendations to the board for new members. Employee complaint procedures should be made available to all employees. y Minutes should be taken at all meetings and committees should report formally to the board on a regular basis. fringe benefit and incentive plans. y Formalize employee performance evaluations. and monitor the board performance. y Have independent members on the audit committee. fees and level of services and scope of both audit and non audit services. y Board code of conduct policy for non-employee directors should be documented and provided to board members.y An audit committee should monitor public accounting firm audit work. including a financial expert. their independence. Employees should be made aware of non-retaliation policy and that they can be anonymous. y A compensation committee should address remuneration levels for executive officers. y The corporate governance committee should monitor committee and executive management performance. y Employee code of conduct policy should be documented and provided to employees. (Emily Holbrook.
(a) Board of Directors The board of directors has eight members.2. directives and guideline. evaluate and handle the risks. rules. as all directors are recruited after fulfilling the high requirements we have set. Internal control system is designed to manage risks. the Board of Directors¶ responsibilities are being set under the Bursa Securities Listing Requirements to : (i) Identify potential or major risk and make sure the implementation of appropriate control measures to handle the risks. Under the Malaysian Code on Corporate Governance for companies listed on the Bursa Malaysia Securities Berhad. The directors are all holding senior positions in the public and private sectors. they are all experienced and have good abilities. including three executive directors and five independent non-executive directors. Our company has applied the principles and obeyed with the suggested practices as set out in the Malaysian Code on Corporate Governance. The Board has to ensure the proper management of risks to avoid any unwanted uncertainties. regulations. systems that match with the applicable laws. Does your company practice CG? Yes. It meets on a quarterly basis and additionally as required. including strategic direction. (ii) Review the suitability and integrity of the internal control system as well as the management information systems. The Board holds the responsibilities to guide the Company¶s business. capital . and provide only reasonable assurance against any loss. Our company¶s policy is to manage the Group¶s operations by practicing and maintaining the appropriate standards of good Corporate Governance. not eliminate them. Genting Malaysia practices Corporate Governance. in order to settle the risk that may affects the achievement of our Genting Malaysia¶s business and corporate objectives. The Board confirms that there is an ongoing risk management process applied to identify. It has a formal schedule of matters regarding its decision.
which states that ³the board of a company should maintain a sound system of internal control to safeguard shareholders¶ investment and the company¶s assets´. The Formal Board Committees of Genting Berhad is established by the Board in accordance with the Code. acquisitions and disposals. should any candidates lack of the mentioned elements. There are high restrictions set in order to recruit qualified members for the Board. they are to identify and recommend. Any retiring Director is eligible for re-election. namely the Nomination Committee. reputation and current position. Directors are aware that the system of internal control is designed to manage rather than eliminate risks. As mentioned earlier. They assist the Board in the division of its duties.expenditure plan. . past performance. Genting Malaysia has set up an internal control system to identify and ensure the implementation of appropriate control measures to manage the principal risks identified. (b) Internal Control Genting Malaysia has obeyed with the requirement set in part 1 of the Malaysian Code on Corporate Governance (MCCG). Audit Committee and Remuneration Committee. which candidates should be appointed to the Board and Board Committees. annual operating plan. The Articles of Association of the Company provides that at least one-third of the Directors have to retire at every Annual General Meeting and all Directors will have to retire once in every three years. their name will be terminated from the list. The Board is holding the role to manage the Group¶s system of internal control and risk management. The selection of candidates is based on their ability. capital projects and monitors on the operation and financial performance of the Group. The Nomination Committee is formed by the independent non-executive Directors.
evaluating and handling the risks. The Remuneration Committee met twice during the financial year. Director¶s fees are then approved at the Annual General Meeting by the shareholders. Information provided by the independent consultants and others appropriate survey data are taken into consideration. There is an internal audit department with adequate resources. it includes two independent non-executive Directors and one executive Director. which is to assist the Board in maintaining the internal control system. However. Directors should not participate in decisions making regards to their own remuneration packages. Besides that. Besides that. (c) Remuneration For the Remuneration Committee. provides the Board with much of the assurance it requires regards to the adequacy and integrity of the system. for the purposes of safeguarding shareholders¶ investment as well as Group¶s asset. The Board is to determine the level of fee of non-executive Directors as well as executive Directors. The department is to report often to the Audit Committee. so that the stakeholders . (d) Shareholders We acknowledge the importance of timely and equal transmission of information to the shareholders. It is responsible for making some recommendations to the Board on the remuneration packages of executive Directors and members of Board Committees.Therefore. investors and public. the Group is also put in place a risk management process to help the Board in identifying. any Director who wishes to seek independent professional advice regards to his duties may do so at the Group¶s expense. cannot provide an absolute assurance against material misstatement or loss.
annual financial statements and the annual review of operations in the annual report are presented to provide a balanced and clear assessment of the Company¶s prospect as well as performance.would be able to analyze the company¶s performance. Investor forum in local and abroad as well as briefings and meetings with analyst and fund managers are held to give shareholders and stakeholders a better understanding of the businesses of the Group. press releases. This has ensured that the board is able to maintain its independency and is not involved in the audit process of the financial statement. The Directors are also required to prepare financial statement for each financial year according to the Malaysian Accounting Standards Board Approved Accounting Standards in Malaysia for Entities Other Than Private Entities.com which contains of annual report. The Group provides a corporate website www. and which give an equal and true view of the state of affairs of the Group. announcements and investor presentations. (e) Accountability ± Financial Reporting The Board is to ensure that the quarterly reports. This shows the company is trying hard to maintain the transparency of financial and nonfinancial information to the shareholders. The Company¶s Annual General Meeting is being held in the form of dialogue with the shareholders. (f) Relationship with Auditors The Company has an appropriate and transparent relationship with the external auditors through the Audit Committee. In the course of audit of the Group¶s financial statement. the external auditors have highlighted to the Board and the Audit Committee about the issues that require the Board¶s attention. as well as of the Company at the end of the financial year. . quarterly results.genting. Shareholders are encouraged to participate and throw in their questions about the latest proposal and the operations of the Group.
our Genting Malaysia¶s Board and management have high restriction in all the operation and decision made. Therefore. Except that. In this part. The main point of corporate governance is the transparency and disclosure principles. Good Corporate Governance . 3. Corporate Governance initiatives increase the possibility to attract equity investors. good corporate governance ensures higher market valuation. Discuss the importance/benefit of CG to organization Corporate Governance gives importance to shareholders¶ welfare and also includes the relationships between the strategic goal of the company as well as its stakeholders. Raising capital will become an easier task as there are supports from its stakeholders. Corporate Governance practices encourage a system of internal control. in order to obtain the trust of the stakeholders. Management Good corporate governance allows everyone to assess the company on how well it is being governed.All Audit Committee meetings are attended by the external auditors for them to present their audit plan as well as report. which will lead to better profit margins. Corporate governance initiatives have to make sure that the Board and management take appropriate and timely steps that benefits the business of the company. A company that follows good corporate governance also can achieve asset diversification through mergers and acquisitions in an easier way. besides that our company¶s operation is under high transparency. Transparency Corporate Governance encourages more transparency of the business and the company. This transparency is enhanced by improving access to capital and financial markets. their comments will be presented on the audited financial statement too. One of the advantages of corporate governance is that the benefits are measurable.
and everyone can access and get them. We Genting Malaysia have appropriate relationship with our shareholders. The shareholders will have greater security on their investments to the company because of the transparency and access to investment details. Benefits to Shareholders The shareholders are very important to the company. If there are two companies with similar financial records. as mentioned. Benefits to the National Economy There will be a good flow in capital. Our Genting Malaysia practices high transparency. for example Singapore. which make them have more confidence towards the company. to inform and enhance more understanding of our company¶s decision and operation to them. as investors have greater confidence. good corporate governance practices can even bring advantages to a country¶s national economy. we have a fund manager dealing with our shareholders. we provide all the necessary material in our website. Therefore. good Corporate Governance can helps in reaching their satisfaction and expectation level.practices will directly increase the corporate value of the company. obviously the institutional investors will choose to invest in the one that has shown a proved record as a well-governed company. . Genting Malaysia has attracted many investors to Malaysia. except that. They are well-informed on all the important decisions of management. Good Corporate Governance initiatives assist the Board and the management to act on objectives that brings the best benefits of both the shareholders and the company. when a country has good reputation for its strong governance practices. The reporting and accounting standards applied by the country are also important to bring in investments to the country. as they are encouraged to participate and share their thoughts during our Annual General Meeting.
In the other words. promote ethical wealth and fulfill rule of law: fair and orderly. An increase in investments will lead to the increase of growth in the economy. productivity would be enhanced and so growth is enhanced. good Corporate Governance can help in increasing firm value. many problems will occur and greatly affected the company as well as the economy. . but rather political cronyism and some other unrevealed trade. For society part. Good Corporate Governance builds confidence in the financial system which leads to the increase of mobilization and investment. this require an all-embracing characteristic of good corporate governance. as well as increasing competitiveness. Good governance ensures that resources are distributed to those that utilize it best. If the selection of both senior management and members of the Board of Directors is not based on qualification and competence. then there is a high possibility for the emergence of poor corporate governance. that is the reason why we have good corporate governance system. Good Corporate Governance can lead to a stable macroeconomic situation as well. If so.Macroeconomic Benefits A good system of corporate governance brings a sustainable economic development. it revitalizes market economy. it can form a more open and transparent society. prevent corruption. On the corporate¶s view. When it reaches economy. have positive development on capital market and more globally competitive. a poor corporate governance system will lead to an unstable macroeconomic system. enhancing the capital efficiency and protect the shareholders¶ right. Good Corporate Governance can cause the stabilizing impact and growth impact on macro economy. lowering the cost of capital. therefore our selection is based on qualification and competence. by improving the performance of companies as well as increasing their access to outside capital. Genting Malaysia¶s Board members are appointed through some restrictive process. sustainable economic growth.
Why CG is an important exercise in business operation. therefore managed to attract more investors and maintain the existing investors. y Lowers the capital cost . it is indispensable in any business operation. c. Provides satisfying return to the owners as well as managers to achieve objectives that are in interests of the shareholders as well as the organization. Helps in brand formation and development g. As mentioned earlier. more capital is provided by the investors. there are 8 benefits for Corporate Governance: a. Corporate Governance is beneficial to a company. the company can utilizes the capital to develop and get more profits. f. e.managementstudyguide. risks and mismanagement. Minimizes wastages. Positive impact on the share price (increase) d. Maintains investor¶s confidence.htm 4. http://www. company can raise capital efficiently and effectively. Ensures organization is managed in a manner that meets the best interests of all. company can raise capital efficiently and effectively. Lowers the capital cost h. therefore it is an important exercise in business operation. as a result.Basically. as a result.com/corporate-governance. In this situation. Ensures corporate success and economic growth b. There are several reasons that make CG an important exercise in business operation: y Maintains investor¶s confidence. corruption. Corporate Governance can form a good reputation for companies.
capital will increase. . Owners. by that it can helps in brand formation. shareholders and stakeholders are all interrelated. Corporate Governance can assist and monitor the operation as well as decision made by the Board and Management. the company can develop further. corruption and inappropriate decision. Therefore. y Ensures organization is managed in a manner that meets the best interests of all. It can helps in avoiding mismanagement. that will bring up the share price and all people will be benefited. in a result the capital cost can be lowered. y Minimizes wastages. risks and mismanagement. all shareholders and stakeholders will be more confidence and trust on the company. In order to gain benefit for oneself. corruption. Corporate Governance can bring good reputation to the company. meanwhile more and more investors are attracted to join the company. y Positive impact on the share price When the company has good reputations through its good Corporate Governance. So by reaching the satisfaction level of shareholders. Besides that. one will have to bring benefits to the others. and as a result. When there are more investor. more people join the investment. More people are willing to invest in the company¶s share.Since investors have more trust and confidence on our company. managers. they will remain their position. owners and managers will get their own benefits as well. y Provides proper inducement to the owners as well as managers to achieve objectives that are in interests of the shareholders as well as the organization. y Helps in brand formation and development As mentioned. it can minimize the wastages and lowers the possibility of risk occurrence. when the company is well-recognized in a good way. This is a win-win situation.
All enterprises in that country suffer the consequences. 2011) A misuse of incentive-based compensation and poor corporate governance in the financial sector are acknowledged as two of the main competing causes of the financial crisis. it ensures corporate success and also economic growth. it becomes more dynamic. and when there are more economic activities. As a result. capital will flow elsewhere. ³If a country does not have a reputation for strong corporate governance practices. When the capital market reacts positively. Therefore. If investors are not confident with the level of disclosure. so it can ensures organization to be managed in a manner that meets the best interests of all. more activities will appear in equity market. after that there will be a higher sustainable market capitalization. It will attract more individual investors for long-term investments. capital will flow elsewhere.´ (Arthur Levitt. When Corporate Governance helps in enhancing the company¶s development and forming its brand. Example: . more institutional investors are attracted to invest in the company and more equity participation from Government agencies. Corporate Governance is an important exercise in business operation. When risks are minimized over long term. everyone will be benefited.Corporate Governance can assist the Board and management on their decision and operation. y Ensures corporate success and economic growth. former chairman of the US Securities & Exchange Commission. capital will flow elsewhere. If a country opts for lax accounting and reporting standards.
The main problem is due to the lacking of shareholder monitoring and a weak disciplinary effect of the market for corporate control. .pdf) Regarding the example.12. politicians and other regulators should pay much more attention on the fundamental corporate governance problems rather than just regulating executive compensation.12. Therefore. The well-managed situation is due to the establishment of good Corporate Governance. Without shareholder monitoring. it is analysed that the crisis is not caused by the incentive-based compensation but is instead the fundamental corporate governance problems in a majority of the banks.dk/fileadmin/site_files/filer_oekonomi/seminarer/Management/BankPa per. It turns out that the CEO has used this power to increase his own compensation.09. the company was awarded in Asia¶s Best Companies 2007-Malaysia ± No. Except that.´ (http://econ. the incentive-based compensation then are more risky and performed significantly worse than other banks.³There was a Danish banking sector where nearly twenty percentages of all listed banks have disappeared during the financial crisis ± some of the banks are considerably large. However. Genting Malaysia has high restriction on the management as well as the Board of Director structure. the CEO becomes very powerful ± a power that depending on the type of the CEO has been used in different ways.au. The results show that banks with incentive-based compensation to the CEO performed significantly worse than other banks.6 in Best Corporate Governance and Corporate Governance Asia Recognition Awards 2008 as Asia¶s Best Companies on Corporate Governance. this situation happens because of the unfocused ownership and restrictions on shareholder rights. the excessive risktaking was already exist before the introduction of incentive-based compensation. Genting Malaysia take it as an important element to operate its business and company . the occurrence of the issue mentioned is impossible. in year 2008.
Genting Malaysia has even more investors and better development. Therefore. Corporate Governance practice is a must. it is proved that Corporate Governance is very important as it is beneficial to the company. . without Corporate Governance.After obtaining the honoured award. it is obvious that all companies should practice Corporate Governance. it has been acknowledged as a wellmanaged company. it is obvious that Corporate Governance is an important exercise in business operation. in order to further develop the company. Therefore. Conclusion In conclusion. the expansion will be limited and the company¶s development might even stuck in a worse situation. Genting Malaysia has expanded its business this far.
referenceforbusiness.smartpros. Retrieved July 17. y http://www.smartpros. y http://www. from http://www. K. Retrieved July 17.).antiessays.d.com.Reference y http://phx.com.html. y http://www.d.d. from http://accounting.).).com. (n.com/corporate-governance. BankPaper.corporate-ir. from http://www.).antiessays. 2011.htm. Bad Corporate Governance and Powerful CEOs in Banks.12.d. 2011.).managementstudyguide. from http://phx. y L.12.html. 1-2.09. Retrieved July 17.com/x55104.com/encyclopedia/Con-Cos/CorporateGovernance.managementstudyguide.zhtml?c=108535&p=irol-govmanage.com/free-essays/99121.html. 2011. (n. Retrieved July 17.referenceforbusiness.Bechmann.net/phoenix.xml. 2011. y http://www.d.corporate-ir.d.com. . (n. y http://accounting. (n.ehow.net. 2011. from http://www. Retrieved from http://www.). Retrieved July 17.ehow. (2009).com/list_6058186_benefits-corporate-governance_.com. (n. (n.
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