| Siti Hajar |
CORPORATE governance has been described as the fore-front to the success of any form of business and its adop-
tion pegged as the key driver for sustainable corporate growth and long-term value creation, providing the com-pany with competitive edge.
During the opening of the Darussalam Asset Forum that was held yesterday at The Empire Hotel & Country Club, the Second Minister of Finance stressed in his speech that this particular practice should be a priority for firms “as it presents opportunities to manage risks and add value”.
With the emphasis that companies should adopt good corporate governance for its own benefits, Pehin Orang Kaya Laila Setia Dato Seri Setia Awg Hj Abdul Rahman bin Hj Ibrahim also reiterated that companies with such practices have higher chances to raise funds.
“When corporate governance foundations are in place, investors and potential partners will have more confidence in investing in, or expanding, the company’s operations,” he said, also quoting research that shows 80 per cent of global institutional investors are more willing to pay a premium for the shares of a well-governed company over companies that are poorly governed despite comparable financial records.
Despite the government’s backing, Government-Linked Companies (GLCs) currently under Darussalam Assets’ portfolio are not exempted from such (international) ex-pectations.
It was also reminded that good corporate governance will serve as an important tool to achieve government policies, especially economic diversification and the crea-tion of more employment opportunities.
With a pivotal role to play in the nation’s long-term development plan, GLCs have the potential to provide a solid base for economic and social developments and can also contribute to the nation’s fiscal strength while playing a pivotal role in its long-term development plan as they continue to provide much needed services to the public and industry.
“The adoption of good corporate governance practice is, therefore, a key driver of sustainable corporate growth, long-term value creation and competitive edge. It should be a priority for firms as it presents opportunities to manage risks and add value.
“Corporate governance also simplifies the path for un-listed companies to one day attract new shareholders and raise funding through public listings,” added the Second Minister.
However, as a non-standalone initiative, stakeholders as are urged to commit to this practice by way of ensuring the successful implementation of the corporate governance framework.
“Although corporate governance framework should pay due regard to best practice principles, it should also be implemented in a manner that is measured, realistic and pragmatic”, in that “we realise corporate governance is not an end in itself, but a means of adding value and providing continuity”.
In an interview following the half-day forum that was attended by representatives from both the government and private sectors, Darussalam Assets CEO Dato Paduka Dr Hj Mohd Amin Liew bin Abdullah explained that there is potential to bring in more GLCs but this would be determined by Darussalam Assets’ success with its current portfolio.
“If we are successful in what we do, then this is something we will look into as to whether there are other GLCs that will benefit from coming into Darussalam Assets, he said.
At present, the CEO acknowledged that there is still more to be done with the consideration that the organisation just hit its two-year anniversary and its main objective now being to set up building blocks towards creating a solid business foundation, not just for Darussalam Assets but also in managing GLCs.
“We will try to share with our GLCs, towards helping them build good business foundations so that they will be sustainable and to develop opportunities for them to grow further”, whilst also contributing to Vision 2035.
“There are plenty of things we need to work on and we will set ourselves very challenging targets,” he said, with the coming year slated to witness “a lot of exciting things” for Darussalam Assets.
Among the main challenges, he explained, will be en-gaging the GLCs in adopting good corporate governance on top of managing their other daily duties, but efforts thus far have not been met with any major resistance.
“We may not see the result immediately, but they will come to realise that this is good for them.”
The forum, meanwhile, was organised to increase aware-ness on the importance of corporate governance as the key to promoting best practices and incite investor confidence aimed at assisting companies in developing new sources of finance for expansion and growth.
It also provided GLCs and the business community in Brunei with a networking platform to enhance mutual co-operation.
Among the invited speakers include those from the Sin-gapore, Thailand and the United Kingdom.