FGV crisis: A look at the PM’s 3 principles for a resolution

Najib-FGVBy T K Chua

I like to read what Najib Razak says simply because he is the Prime Minister.

Recently he outlined three principles to resolve the situation in Felda Global Ventures (FGV), namely (i) that the resolution should adhere to laws governing the company; (ii) that it should comply with good governance; and (iii) that the decision arrived at should be fair.

Let’s go through these principles to see how useful they are to the problems at hand in FGV.

THE FIRST PRINCIPLE: I think it is common sense that a resolution to solve the problems in FGV must adhere to the laws governing public companies. Surely we can’t have resolutions/solutions that are illegal or against the law.

More importantly, however, is to determine whether or not the problems that exist in FGV at present have originated from violations and contraventions of any law governing a public company.

If so, these problems have become “crimes” which require intervention from regulating and enforcement agencies. I don’t think companies are allowed to forgive and forget crimes committed against them.

I think we should follow the law at all times, not when we are finding solutions to our problems. By then it will be too late. Our daily operations must follow the law regardless of the circumstances.

THE SECOND PRINCIPLE: This too is common sense. Ultimately, any resolution to a problem must lead to better governance and quality assurance.

We have codes of corporate governance, pledges and oversights. Although all these are strictly not obligatory, they do provide strong “moral suasion” on company directors and executives to behave.

Compliance with good governance should be relentless and continuous. We do not allow bad governance to take root and then talk about better governance when trying to find solutions. It means the company did not have good governance to begin with.

THE THIRD PRINCIPLE: I have a little problem with this one i.e. that the resolution/decision arrived at should be fair.

My first question is fair to whom? To the company or those involved in the conflict?

Can it be considered “fair” if we are not too harsh on those who have committed wrong to the company? Have we not often seen those who committed wrong being protected while the company that suffered under their poor management and abuse is left to carry the burden?

FGV shouldn’t be looking for fair decisions; it should be looking at correct decisions – decisions that punish and reward without fear or favour and decisions that are able to right the wrongs.

T K Chua is an FMT reader.

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