Keynote Address by YB Dato Sri Mohd Effendi Norwawi
Minister in the Prime Minister’s Department
Launch of StarBiz - ICR Malaysia Corporate Responsibility Awards
Thursday, 25 January 2007
Conference Hall, Securities Commission
YBhg. Datin Linda Ngiam,
Executive Director, Star Publications (M) Bhd
YBhg. Dato’ Johan Raslan,
Chairman, Institute of Corporate Responsibility, Malaysia
YBhg. Dato’ Zarinah Anwar,
Chairman, Securities Commission Malaysia
YBhg. Dato’ Yusli Mohammed Yusuf,
Chief Executive Officer, Bursa Malaysia
Corporate citizens, NGO representatives,
Honoured guests.
It is indeed my real pleasure to be here this morning to deliver this keynote address for the Launch of StarBiz - ICR Malaysia Corporate Responsibility Awards.
If I recall, not too long ago we saw the presentation of Prime Minister’s CSR Awards, organized by the Ministry of Women and Family Development, in November last year. I must say we should keep the momentum of CSR going with real vigour and enthusiasm.
Ladies and gentlemen,
I am delighted that corporate responsibility is now a buzzword…. but it should be more than that. It should be a way of life. Please understand that true corporate responsibility practices address economic, social and environmental issues simultaneously, targeting areas of competitive context where a company and society both benefit because of the company's unique assets and expertise.
Corporate responsibility goes beyond charitable activities and includes issues with a direct impact on society. It does not replace or overlap the roles of Government in providing public services or infrastructure, but is an add-on to those not actively managed by the Government.
Ladies and gentlemen,
We normally associate success with building hard infrastructure. This is true especially in the context of our Ninth Malaysia Plan. But somehow, the “soft” factors, in an environment of trust, are also required. This entails governance, transparent reporting and most of all being responsible.
It is widely understood that corporate responsibility is essentially a calling for businesses to do their best, where a ‘business case’ can be made. This should contribute positively to sustainable development – take into account its social and environmental impacts; more importantly through social or community investments. I believe in the long run it is indeed true that: "Leaders keep their eyes on the horizon, not just on the bottom line” - Warren G. Bennis.
I believe strongly that there is an active alignment of internal business goals with externally set societal goals (those that support sustainable development).
Allow me to share that in our consultations I have heard comments “If it ain’t broke why fix it?” Or better still… “Haven’t you heard about serendipity… let the private sector move its own way!”
YES! Corporate bodies can find and fund corporate responsibility by chance - similar to the apple falling on Newton’s head and him discovering the famous law of gravity. But allow me to share that in reality, “Serendipity accounts for one percent of the blessings we receive in life, work and love. The other 99 percent is due to our efforts” - Peter McWilliams.
Those efforts, ladies and gentlemen, would have to be the Government’s, the private sector’s, the NGOs’ and in short EVERYONE fitting into the role. The Government is merely setting the centre stage for this to happen. Allow me to explain…
Initially, knowledge of corporate responsibility among local companies was still poor and patchy, let alone among the public at large. Since then, much effort has been poured into promoting corporate responsibility. There is an increasing availability of information and enhancement of the roles of civil society organizations and the tireless teams in Securities Commission, Bursa Malaysia, Petronas and now ICR Malaysia, in building trust, good governance as well as crucial efforts.
They have provided the much needed input for us to move ahead. One thing is for sure, in today's globalised world, going without corporate responsibility is a serious handicap to competitiveness.
Let us not forget that in the 2007 Budget, the Government had already made it mandatory for all private limited companies (PLCs) to disclose in its annual report the corporate responsibility (or corporate social responsibility) activities undertaken. In the 2008 Budget, we have also recognised that the private sector has been successful in effectively implementing CSR projects for the benefit of the low income group.
We have consistently been recognised by global institutions such as the World Bank and IMD for our efforts to promote development in line with growth and distribution. But how then do we ensure that corporate responsibility activities ‘jive’ with the development plan?
For the Economic Planning Unit, we have aligned the traditionally project-based Ninth Malaysia Plan to bring about a new novel way of harnessing CSR and corporate responsibility to support our national mission. It can and will make Malaysia a destination for people not only to work, but also live and play. In this, the private sector and the Government will share a synergistic platform of cooperation through the Ninth Malaysia Plan. Corporate responsibility can play a major to promote these key areas in Malaysia:
Human capital development that covers, among others, adoption of rural schools, provision of financial support to education and R&D, and youth development programmes;
Social development that includes poverty eradication, skills development and encouraging Bumiputeras in professional, technical and knowledge-based occupations;
Performing arts such as music, dramas and plays as well as the conservation of architectural design and heritage sites; and
Environmental protection including habitat conservation and alternative energy source development.
I believe that corporate responsibility can promote a vibrant cultural landscape, a rich suite of recreational activities, which are just some of the necessary ingredients in creating an attractive place to work, live, play and learn. Indeed, I am confident that these efforts will inevitably contribute in attracting and retaining globally mobile talents in a top-class living environment. The obvious opportunities for Malaysia, and our greatest advantage, will now come from our being a global city. Some of the challenges we face are no different from those of any other developing society. We know we have to work smarter, not work cheaper, in order to thrive amidst the competition with China and India, and before too long with new players like Vietnam.
Companies are rewarded as well. A good corporate responsibility policy can help companies gain a competitive advantage in attracting investors as well as offering excellent risk management strategies.
There is indeed a connection between corporate responsibility and business. I have seen corporate responsibility as a "cause-related marketing" or "strategic philanthropy", an effort where a company concentrates on a single cause or an admired organization. This definition is far short of true corporate responsibility practices with strategic value, because it emphasizes publicity rather than social impact. It enhances goodwill, but does not improve a company's ability to compete, vis-à-vis:
stronger financial performance and profitability
improved relations with the investment community and better access to capital
enhanced employee relations that yield better results
In fact there is growing evidence [through indices such as the Dow Jones Group Sustainability Index (DJGSI)] that companies that embrace corporate responsibility generally outperform their counterparts that do not use the features of corporate responsibility.
I am told that an increasing number of mutual funds are now integrating corporate responsibility criteria into their selection processes to screen in sounder companies and/or screen out businesses that do not meet certain environmental or social standards. In fact, retail and institutional investors are factoring values and corporate responsibility expectations into their portfolio management as well.
In terms of human capital, a survey conducted in Canada, for example, found that 71 per cent of employees want to work for companies that commit to social and community concerns.
Thus, in essence, a corporate responsibility approach by a company can improve the stature of the company; be it access to the best people among the investment community and its capacity to access capital from that community.
I have given some examples in my earlier speeches but some good things deserve special mention:
1.Look at how DIGI shares its gains to become the winner of the Prime Minister’s CSR Awards last year. It is not about monetary rewards but when it won the "Best Workplace Practices" means DIGI has succeeded in promoting good work-life balance including gender equality and for encouraging social interactions that include the families of the employees. It also outshines others in the category of "Culture and Heritage", DIGI is also the winner for initiatives made to champion preservation of culture and heritage in Malaysia.
2.Just look at what is happening in South Korea. Over here, we only think of Samsung as a product. But little do we know that Samsung has adopted the Green Management philosophy as part of its commitment to take part in the global effort to enrich human lives and preserve the environment. Not stopping at environment, SAMSUNG's interest in culture and the arts dates back to the 1960's. Since 1965, the SAMSUNG Foundation of Culture has worked to uncover, preserve and broaden the awareness of Korea's rich cultural heritage.
Over the years, SAMSUNG has contributed extensively to numerous museums, galleries and exhibits in Korea and around the world. It also provides early artistic development, such as the annual Bichumi Painting Festival, the Glass Modelling Academy, and the Kenox Photo gallery.
This is just one way corporate responsibility and CSR has worked well for South Korea as well as Samsung.
Ladies and Gentlemen, corporate responsibility can bring power of perspective. There are many other ways to bring it to centre play of Malaysia’s Development Agenda.
Corporate responsibility has bountiful opportunities for many. I recall Albert Einstein once said “Imagination is more important than knowledge” This is exactly the case with corporate responsibility. It is more than philanthropy. Let us step outside the boundaries of the norm and think outside the BOX.
A number of leading companies (including many of CSR Europe’s members) have taken action in partnership with key NGOs. In fact, today’s retail giants such as Levi’s and Nike allow independent monitors free access to inspect their factories from El Salvador to Indonesia. In the health sector, Heineken and Coca-Cola Africa for example have provided African employees and their families free anti-retroviral drugs to treat AIDS.
Efforts are aplenty and opportunities are bountiful. What is lacking now is a roadmap which will be holistic and a sustainable approach to bring forward the corporate responsibility movement in Malaysia.
In the UK, it has taken a different approach. A CSR Academy was established in July 2004 as a resource for organisations of any size and sector wanting to develop their corporate social responsibility skills. This provides a unique offering of resources which are focused on integrating corporate social responsibility into day-to-day business practice. Likewise at the EPU, the setting up a CSR Secretariat will be the national platform in fostering dialogue and collaboration among various corporate responsibility stakeholders. It will play a pivotal role in defining the direction and landscape of corporate responsibility and promote it as a coordinated national initiative.
For Malaysia I can see a healthy mix of large corporations and small, nimble entrepreneurial start-ups working together with the Government to support our corporate responsibility initiatives.
In conclusion, we have a good base of practices and programmes which we can build upon. The success of corporate responsibility will depend on how well we steer the activities in the coming years. It will require the collective and sustained effort of all you and the active support of community networks to make the critical difference in this important endeavour to nurture our society who are proud to be Malaysian with the heart of giving.
On this note, I would like to add my heartiest congratulations to the organizers of the inaugural StarBiz – ICR Malaysia Corporate Responsibility Awards for its launch today. I wish you success and … let the race begin!
Thank you.
