Governance and Corporate Governance

Module Overview

• Module 2 focuses on integrity and core well-being.

Governance

• Governance was previously known as 'administration'.
• It is a process used by an organization or community to tackle issues.
• Key aspects are transparency and accountability.
• It shapes the framework, values, and objectives in human life.
• It is the manner of managing policies, functions, or operations of a corporation or state.
• The objective is to ensure the success of an organization and uphold stakeholder values.

Importance of Good Governance

• Good Governance gives direction to public and private sectors.
• It enables transparency and accountability.
• It reduces corruption.
• Good governance reflects effective policy and program implementation.
• It addresses governance weaknesses, inefficiency, transparency, and bureaucratic red tape.

Corporate Governance

• Corporate governance is a structured system managing a company's business affairs.
• Transparency underpins business profitability and corporate responsibility.
• It aims to achieve long-term shareholder value while considering stakeholders' needs.
• Key elements of corporate governance include establishing a code of ethics.
• They should also encourage diversity and inclusivity.
• Transparency and sustainability in administration are critical.
• Corporate governance aims to instill confidence in customers and the community.

Humanitarian Governance

• Humanitarian governance focuses on human capital development.
• Humanitarian governance encourages the internalisation of values and principles in everyday life.
• It provides guidance for individuals in recognising their nature and managing relationships.
• Human values include awareness of justice, compassion, and social responsibility.
• Practicing tolerance and empathy in relationships relates to humanitarian governance.

The Alignment Between Corporate and Humanitarian Governance

• Alignment ensures balance in various aspects of human life.
• Understanding and practicing these dimensions achieves well-being at different levels.
• Balancing material and spiritual goals ensures comprehensive success.
• It can propel positive transformation.

Ethics

• Focuses on ethics and Integrity.
• Moral standards or principles form the basis of integrity.
• Ethical practice is the application of good conduct or principles in everyday life.
• A collection of values and norms influence behaviours and actions.
• It provides what is “right and wrong” and “good and bad”.
• It includes implications of actions on oneself, others, and society.
• Embracing ethics can foster a corruption-free and integrity-driven society.

Ethical Principles

• Social norms in society are based on ethical values which form moral principles.
• Ethics guides interactions within society.
• Adhering to ethical principles benefits both individuals and society.
• Ethics serves as the moral guardian for personal and social responsibilities.

Definition of Integrity

• The term 'Integrity' comes from the Latin word "integer", and means wholeness.
• Dewan Bahasa defines integrity as honesty, sincerity, and perfection.
• Integrity relates to openness, transparency, and trustworthiness.
• Integrity is a fundamental character quality.
• It encompasses trustworthiness, honesty, patience, and responsibility.

Integrity Defined

• Integrity relates to ethics.
• Integrity refers to knowledge, awareness, internalisation, and unwavering commitment.
• It includes dedication in every word and action, aiming for personal and organisational excellence.
• It is rooted in the principle of adhering to honesty and high moral practice.
• It encompasses attributes without being separated.

Integrity Definition

• Integrity is inherent in human existence.
• It must be cultivated through education, training, and continuous effort.
• Integrity is a critical element of human well-being.
• There is a positive relationship of integrity with individual, community, and organisational well-being.

Perspectives of Integrity

• Stanford Encyclopaedia of Philosophy (2004) divides integrity into four perspectives:
• Perseverance in personal values.
• Commitment to personal values.
• Commitment to community values.
• Commitment to pure values

Factors that Compromise Integrity: Leadership

• Leadership shapes organizational and societal culture.
• Leadership must provide firm guidance, direction, and enact changes.
• Weak commitment can lead to a decline in integrity.
• Leaders who do not set a good example compromise integrity.
• The failure of leaders to adhere to laws and regulations compromises integrity.
• Directives which contradict laws compromise integrity.

Factors that Compromise Integrity: System and Procedure

• Includes lack of transparency involving public interests.
• Weaknesses in systems, procedures, and guidelines.
• This can lead to inefficiency, confusion, and disputes.
• Ineffective enforcement, sometimes selectively carried out.
• Inadequate monitoring and evaluation of effectiveness.
• Limited human or material resources.
• Outdated legal framework and inconsistency in certain laws.

Factors that Compromise Integrity: Structure and Institution

• Structural and institutional factors are critical components.
• They ensure smooth administration by government and the general public.
• An organisation structure should be streamlined, focused, and have objectives.
• Parts within it need to be appropriate for their tasks.
• Organisations need to be adjusted to address new demands and challenges.
• An untidy, unfocused, or outdated structure wastes resources and renders it ineffective.
• Insitutions play a crucial role in the overall administrative system.
• There should be scope, duties and responsibilities between institutions that are detailed and coordinated.
• Overlap can lead to unhealthy competition.
• Lack of coordination can lead to resource wastage.
• Conflicting goals can compromise integrity.

Factors that Compromise Integrity: Culture

• Environment is crucial for shaping values and behaviour.
• A culture that upholds integrity to ethical behaviour.
• A culture that lacks integrity can influence individuals to be indifferent.

High-Risk Job Sectors that may give rise to integrity issues: Public and Government Sector

• They are related to public fund management and governance.
• There is a risk of corruption, nepotism, abuse of power and immoral actions.
• Civil servants are a high-risk group for corruption.
• They are especially at risk in decision-making and government procurement processes.

High-Risk Job Sectors that may give rise to integrity issues: Business and Financial Sector

• There are opportunities to engage in fraudulent activities and manipulate the market.
• Alter financial reports.
• Priority areas at risk of corruption are financial management.
• They are procurement, investment, and administrative management.

High-Risk Job Sectors that may give rise to integrity issues: Medical and Healthcare Sector

• Credibility in the medical field is crucial for patient safety.
• Risks of fraud involve medical equipment.
• Ethical breaches involve increased treatment fees.

High-Risk Job Sectors that may give rise to integrity issues: Education Sector

• Ethical violations can involve misappropriation of education funds.
• There is false assessment, and manipulation of academic information.
• Educational institutions play a crucial role in educating the younger generations.

High-Risk Job Sectors that may give rise to integrity issues: Media and Communication sector

• Social media should adhere to integrity and accountability.
• Disseminating false news can jeopardise media integrity.

High-Risk Job Sectors that may give rise to integrity issues: Information Technology Sector

• Privacy and data risks stem from attacks, theft and unauthorised use.
• Technology increases the risk of misuse and manipulation.
• These issues prompt authorities to address it in online and offline sectors.

High-Risk Job Sectors that may give rise to integrity issues: Enforcement and Uniformed Units Sector

• Professions such as police, military, and customs require integrity for maintaining security.
• Ethical breaches or abuse of power threaten public trust.
• Corruption compromises national security.

High-Risk Job Sectors that may give rise to integrity issues: Agricultural and Environmental Sector

• They require compliance with environmental and food safety laws.
• Actions that harm the environment can undermine the integrity of the industry.
• Land development harms the environment.
• Logging impacts environment.
• Improper logging impacts the rainwater catchment area.

High-Risk Job Sectors that may give rise to integrity issues: Sports and Recreation Sector

• Risks include illicit drug use, match-fixing, and age manipulation.
• Corruption causes negative impacts and damages the country sports image.

High-Risk Job Sectors that may give rise to integrity issues: Construction and Infrastructure Sector

• Corruption can result in shoddy practices.
• There should be a culture of transparency, or it may be a precursor to disaster.
• Risks of mismanagement include fraud, document forgery, and issues with procurement.
• Corrupt practices have increased contract costs.
• There has been a decline in quality.
• There is a lack of adherence to standards.
• Integrity in the workplace is essential for construction quality.

High-Risk Job Sectors that may give rise to integrity issues: Corporate Sector

• Practices such as false marketing, defrauding the consumer, and violating worker's rights can occur.
• Individuals may offer bribery to secure projects.

Promoting Integrity With Students

• Integrity must be cultivated among students and society.
• The aim is to uphold fairness, instil honesty, and ensure transparency.
• The values of integrity play a crucial role in fostering trust.
• Family institutions can shape the integrity of children.
• Cultivating integrity among students begins at home.
• Ethics and integrity values should be instilled at a young age.
• Schools and educators have a role regarding ethics.
• Educators can influence students.
• School administrators also shape a conducive school culture.
• Government introduce new subjects and curricula related to corruption prevention in educational organisations.
• This will enable students to learn and understand the negative effects.
• This helps to develop honesty.
• Introducing mandatory courses can emphasize citizenship and ethics.
• JKKMAR agreed that the Integrity and Anti-Corruption Course (KIAR) be brought to students.
• KIAR offered as an elective beginning in 2021.
• KIAR is strengthened to be a General Studies starting in 2023.

Government Initiatives

• The public sector serves as the backbone in the implementation.
• Apply integrity in all duties and responsibilities.
• Recognising the importance of integrity within the society.
• The government has provided guidelines and implemented the National Anti-Corruption Plan 2019-2023.
• The plan is the government's policy and directive on anti-corruption efforts.
• It encompassses 6 strategies, 17 objectives and 115 initiatives.
• JKKMAR, and JAR were established.
• Agency Integrity Management (BPIA) was established on 1 June 2013
• There is are Integrity Units (UI) and Integrity and Governance Units (IGU).
• As of 31 August 2023, 522 public agencies have established UIs.
• 632 IGUs hav been established at the GLC level.
• Selangor has established training for relevant programs.
• These are often done in collaboration with various entities and institutes.

Conclusion

• Good governance and ethics are crucial in development.
• The effectiveness requires continuous commitment.
• Citizens ought to acknowledge the negative impacts.
• Integrity values shape a competitive nation.