There is an urgent need for board members of Malaysian public-listed companies to look at improving Environmental, Social and Governance competencies as the lack of attention to these vital issues can be viewed negatively by global corporations, asset managers, and financial institutions. This can lead to a lack of investor interest and low shareholder confidence.
The revised Malaysian Code on Corporate Governance (MCCG) issued in April 2017 addresses the urgent need for companies to manage ESG (Environmental, Social and Governance) risks and opportunities, emphasising the need for collective action by boards and senior management.
The urgent ESG issues that need to be addressed by South East Asia
With the world now gravitating toward sustainable investment more than ever, companies with sound ESG backgrounds are preferred by investors. In light of this, here are some urgent ESG issues that need to be addressed by Malaysia / Malaysian companies in relation to anti-bribery and anti-corruption:
- Although economists feel that ESG is still a long way to go, growing sustainably and responsibly is nevertheless vital as the country’s economy recuperates from COVID-19.
- The pandemic has reinforced the importance of ESG issues and accelerated the transition to a more inclusive capitalism. Investors increasingly believe that companies that perform well on ESG are less risky, better positioned for the long term, and better prepared for uncertainty.
- Companies having a robust Anti-Bribery and Anti-Corruption program will also reflect better when it comes to ESG compliance, leading to corporate growth.
Improving Environmental, Social & Governance competencies
Organisations aren’t on their own when building a program to Improve Environmental Social and Governance (ESG) competencies. An organisation’s ESG strategy can be augmented and advanced through ISO Certification and the implementation of an individual or integrated management systems. For example, a sustainable business process framework might include ISO 37001: 2016 Anti-Bribery Management System standard. This standard provides a framework for implementing reasonable and proportionate measures to prevent bribery and corruption. These measures involve top-level leadership, training, bribery risk assessment, due diligence adequacy, financial and commercial controls, reporting, audit, and investigation.
The standard also mirrors numerous steps contained in the U.S. Foreign Corrupt Practices Act (DOJ and SEC) and Good Practice Guidance on Internal Controls, Ethics and Compliance (OECD), Anti-Corruption Ethics and Compliance Handbook for Business (OECD), U.K. Bribery Act 2010 and the British Ministry of Justice’s Adequate Procedures document. ISO 37001 ABMS Standard is flexible and can be adapted to manage many types of bribery and suit any business locally or worldwide.
The importance of complying with legislation
ISO 37001 isn’t the only standard that addresses these risks; ISO 37301:2021 Compliance Management Systems. CMS helps organisations to comply with the legislation that is applicable to them and with the commitments assumed by their stakeholders. They reduce the economic or reputational risks of failing to comply with them and are a fundamental tool for organizations to comply with their corporate social responsibility policies. They undoubtedly help to create a culture of integrity and compliance that fosters sustained success and the organisation’s survival.
Indeed, one of the benefits of ISO certification is that it is designed to fit together like Lego. If you are certified under, for example, ISO 37000:2021 Governance of Organisations, you will be familiar with ISO 37002:2021 Whistleblowing Management Systems.
All ISO standards have in common their ability to help organisations achieve greater profits by managing the processes.
Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence is an independent certification body that provides education and certification services for individuals and organisations on a wide range of disciplines and ISO standards, including:
- ISO 31000:2018 Risk Management- Guidelines;
- ISO 37000:2021 Governance of Organisations;
- Anti-Money Laundering (AML);
- ISO 37002:2021 Whistleblowing Management System;
- ISO 37301:2021 (formerly ISO 19600) Compliance Management system (CMS);
- And ISO 37001:2016 Anti-Bribery Management Systems ABMS.
ABAC® offers a complete suite of solutions designed to help organisations mitigate the internal and external risks associated with operating in multi-jurisdiction and multi-cultural environments while assisting in developing frameworks for strategic compliance programs.
It is is accredited by the United Kingdom Accreditation Service (UKAS CB number: 10613) against ISO/IEC 17021-1:2015 Conformity assessment — Requirements for bodies providing audit and Certification of the scheme’s management systems of ISO 37001:2016 Anti-Bribery Management Systems (ABMS). This makes ABAC® Certification the leading accredited certification body specialising in global anti-bribery and anti-corruption, risk and compliance management system standards.
ABAC® experts audit any existing compliance and anti-bribery anti-corruption management systems to assess effectiveness and vulnerabilities while ensuring your organisation complies with Internal Standards, FCPA, U.K. Bribery Act, Anti-Money Laundering regulations, and all other global, regional and local regulations while maintaining a competitive edge in the world marketplace.
If you seek to validate or expand your existing compliance frameworks to maintain a competitive edge in the world marketplace, ABAC® can help you. Our experts audit your existing compliance and anti-bribery anti-corruption management systems to assess effectiveness and vulnerabilities while ensuring your organisation complies with Internal Standards, FCPA rules, U.K. Bribery Act laws, Anti-Money Laundering regulations, and all other global, regional and local regulations.