Great article by Mak Yuen Teen in the Business Times (Singapore). Very relevant to the situation in Malaysia also where the same practices happen.
Some snippets:
.... "the lack of independence of independent directors here is such an intractable issue that there's little hope of any improvement".
Recently, there was a company that redesignated a non-independent director to an independent director. This director had served on the board for 11 years as a non-independent director, including three years as a non-independent chairman. Unlike the more typical situation of directors being redesignated from independent to non-independent after nine years, this director was re-designated from non-independent to independent after 11 years. This is like someone who was not a virgin and then became one.
.... I have developed a form that asks directors to declare all payments and services and to provide details of these payments and services. I also include a question that asks directors to declare "any other relationships or arrangements" with the company, its related corporations, its key officers and major shareholders. This puts the onus on an independent director to declare, for example, that he has been the regular golfing partner of the CEO over the last 20 years.
Until we allow non-controlling shareholders more say in the nomination and election of directors or the determination of their independence, this search will continue to prove to be elusive.
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