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SSM’S CORPORATE RESPONSIBILITY AGENDA: CROSSING BOUNDARIES

TOWARDS DRIVING BUSINESSES BEYOND PROFITABILITY

MADAM HAJAH ROKIAH MHD NOORDEPUTY CHIEF EXECUTIVE OFFICER (OPERATIONS)

11 MAY 2011

CORPORATE REGISTERS FORUM 2011, SINGAPORE

MAIN AGENDA

Why Corporate Responsibility (CR)?

Why the Companies Commission of Malaysia (SSM)?

The SSM CR Agenda

Driving Businesses Beyond Profitability

The Way Forward : Initiatives in 2011

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WHY CORPORATE RESPONSIBILTY?

WHY? Because it is very relevant in today’s corporate and business environment:

Domestic (Malaysian)

Context

International Context

Benefits

Nexus with Business

Sustainability

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THE RELEVANCY OF CR: DOMESTIC CONTEXT

The concept and implementation of CR practices have been cited and highlighted in many of Malaysia’s national agendas:

Budget 2010 Speech by the the Honourable Prime Minister : “I often remind the private sector and Government-linked companies (GLCs) not to neglect their social responsibilities in their quest for profits.”

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Public Sector Roles in Strengthening Corporate Social Responsibility:

A Baseline Study:

A World Bank related publication that outlines four roles of the publicsector in strengthening CSR, namely the mandating role, facilitatingrole, endorsing role and partnering role.

THE RELEVANCY OF CR : THE GLOBAL CONTEXT

IMD’s 2010 World Competitiveness Yearbook:

The ‘Infrastructure’ Input Factor includes CR related themes such as:

(i) Health problems (sickness, AIDS, alcohol, drug abuse etc); and(ii) Sustainable development .

The Role of Government in Promoting Corporate Responsibility andPrivate Sector Engagement in Development

A publication of the United Nations Global Compact and BertelsmannStiftung which highlights the main public policy options forgovernments in promoting CR and business engagement indevelopment, namely awareness raising, mandating, partnering andsoft law.

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BENEFITS OF THE PRACTICE OF CR

The following benefits have been cited in many business articles and reports:

Retain loyalty among customers and employees

Reduce regulatory oversight

Increase productivity

Increase profit

Attract better employees

Enhance reputation

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CR’S NEXUS WITH BUSINESS SUSTAINABILITY

BUSINESS SUSTAINABILITY

Business sustainability requires companies/firms to adhere to the principles of sustainable development.

Address important issues, such as:

1. economic efficiency (innovation, prosperity, productivity);2. social equity (poverty, community, health and wellness, human

rights);3. environmental accountability (climate change, land use, biodiversity).

Source: Financial Times Lexicon7

WHY THE COMPANIES COMMISSION OF MALAYSIA?

The Companies Commission of Malaysia (SSM) believes that it is in thebest position to drive the CR culture among the corporate and businesscommunity in Malaysia.

WHY?

SSM is theRegistrar of allcompanies andbusinesses inMalaysia.

SSM serves asthe startingpoint to dobusiness inMalaysia.

Existence ofSSM’sorganizationallinkage andnetworking.

Availability ofa ready pool ofauxiliarysupportiveelements.

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THE SSM CR AGENDA

Developed pursuant to SSM’sSecond Direction Plan (2010-2014) which envisages SSM asthe driver of CR by end of2014.

Launched on 30 June 2009.

Sets out SSM’s strategicframework which outlinesSSM’s approach in inculcatingthe culture of CR amongstcompanies & businesses inMalaysia, focusing on SmallMedium Enterprises (SMEs).

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CONTENTS OF THE SSM CR AGENDA

Chapter II: The SSMCR Agenda ParameterExplains SSM’sorganizationalparameter in relationto CR which includesthe definition,organizationalstatement, objectives& classification.

Chapter III: Executingthe Public Sector’sVarious Roles in CRExplains the initiativesthat will be taken bySSM in carrying out itsrole as one of thepublic bodies inMalaysia.

Chapter I: A Snapshoton CRTouches on the originand evolution of theconcept of CR &explains the roleplayed by the publicsector in relation toCR.

Chapter IV: SSM’sEmbrace of theNotion of CRExplains the initiativesthat will be taken bySSM in applying theconcept of CR withinSSM itself & alsoforming relationshipswith internationalbodies promoting CR.

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OBJECTIVES:

1. To nurture the culture of CR in the Malaysian business environment;2. To encourage all companies to strive in striking an equilibrium between the quest for profitability

and creating a sustainable living environment;3. Inculcate a corporate culture among Malaysian corporate players that values and recognizes all

CR initiatives pursued by corporations demonstrated as creating premium for companies and businesses; and

4. Pursue and propagate good corporate governance in a more holistic basis.

THE SSM CR AGENDA PARAMETER

DEFINITION:Commitment by corporations and

businesses towards achieving sustainability in the social,

economic and environmental conditions in furtherance to

the pursuit of profitability

ORGANIZATIONAL CLASSIFICATION OF CR INITIATIVES:

1.Extrinsic: Programs, activities and initiatives carried out by companies and businesses which carry a positive impact externally within the parameter of the social, economic, and environmental well-being of the country; and

2. Intrinsic: Programs, activities and initiatives carried out by companies and businesses which carry a positive impact to the internal institutional environment within the parameter of the social, economic, and environmental well-being.

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THE SSM CR AGENDA LOGO & TAG LINE

The avian icon represents the environment

element.

The human icon represents the social element.

The building of the Petronas Twin Towers icon represents the economy element.

The circular shape of the icons connotes sustainability & universal outlook

SSM’s organizational

logo. Tag Line:“Driving Business Beyond

Profitability”

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DRIVING BUSINESSES BEYOND PROFITABILITY

Towards driving businesses to operate beyond profitability, SSM has carried out several CR-related initiatives since the launch of the SSM CR Agenda in 2009:

INITIATIVES

Formation of Strategic Alliances

Advocacy: Sharing of Knowledge

Promotional Drive

Provision of platform to strategic partners

Advocacy by SSM’s staff

UKM

IIM

UNICEF

Engagement with the media

Global PresenceCSR Asia

CSE

Creation of an Internal Dedicated DriverEstablishment of the CR

Unit

Training for staff & stakeholders

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CREATION OF AN INTERNAL DEDICATED DRIVER

The CR Unit has been established andplaced under the Corporate Developmentand Policy Division, consisting of twoofficers. The CR Unit is generally tasked tostrategize and implement CR-relatedinitiatives in furtherance to the SSM CRAgenda.

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FORMATION OF STRATEGIC ALLIANCES

Since the launch of the SSM CR Agenda, SSM has formed strategic alliances with three dynamic partners:

UKM:

• Signed an MoU (specifically on CR) on 30 June 2009.

• To collaborate in the area of CR, mainly focusing on research and advocacy.

IIM:

• Leveraged on the general MoU signed between IIM & SSM on 7 Aug 2009.

• To collaborate in the area of CR and corporate integrity.

UNICEF:

• Signed an MoU (specifically on CR) on 28 Jan 2010.

• To collaborate towards enhancing the well-being of children through the practice of CR.

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FORMATION OF STRATEGIC ALLIANCES

Following the formation of these strategic alliances, SSM has carried outseveral CR-related initiatives with its dynamic partners, including advocacybased initiatives:

CR-related Initiatives Partner Triple Bottom Line

Development of Best Business PracticeCircular 1/2010 titled Establishment of aChild Care Centre at the Work Place byCorporate & Business Employers

UNICEF Social element

Development of Tool Kit on How toEstablish Child Care Centres at the WorkPlace

UNICEF Social element

Organization of the IIM-SSM CR &Corporate Integrity Forum Series

IIM Economy element

Organization of the Tuanku Ja’afar LawConference on CR & CG

UKM Economy element

Many more initiatives are in the pipe line. 16

BEST BUSINESS PRACTICE CIRCULAR 1/2010

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Launched by YB Dato’ Sri Ismail SabriYaakob, Minister of Domestic Trade, Co-operatives & Consumerism, on 28January 2010

Serves as a general guideline tofacilitate employers in setting up childcare centres at the work place for theiremployees.

Touches on:I. The general legal and regulatory

framework;II. The general procedures for the

registration of child care centres;and

III. The main principles of care.

TOOL KIT ON HOW TO SET UP A CHILD CARE CENTRE AT THE WORK PLACE

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Launched by YABhg. Datin Paduka SeriRosmah Mansor on 9 November 2010

Complements the Best Business PracticeCircular 1/2010 on the Establishment of ChildCare Centres at the Work Place by Corporateand Business Employers

Touches among others, on the following:I. The application of the principle of best

interest of the child;II. Recruitment of qualified staff;III. The importance of having child centred

programmes and curriculum;IV. The need for staff performance

monitoring;V. The need for human resource

management;VI. Financial resources; andVII. Registration procedures.

INVOLVEMENT IN THE NATION’S PROMOTION & DEVELOPMENT OF EARLY CHILD CARE & EDUCATION

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SSM & UNICEF decided to focus on the establishment of child care centres at thework place, in light of the following:

The 10th Malaysia Plan - which calls for the setting up of child care centresto enable better participation by the women workforce in the job market;

Towards creating a sustainable corporate and social environment as well asstriking a balance between economic development and social well being;

To facilitate working parents in balancing their work commitment and thenurturing of their young children;

To ensure the safety of young children of working parents in the corporate &business working environment; and

The need for a high quality early child care & education in the nation’s socialsystem.

Following SSM’s initiative to promote & encourage the establishment of childcare centres at the work place, SSM was invited to be a member of a committeeon Early Child Care & Education (ECCE), placed under Malaysia’s National KeyResult Area (NKRA) on Education.

TUANKU JA’AFAR LAW CONFERENCE

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The Tuanku Ja’afar Law Conference was jointly organized bySSM and UKM on 19 & 20 Oct 2010 at Menara SSM@Sentral,Kuala Lumpur.

The theme of this conference was CR & CG, where morethan 30 papers were presented by presenters from insideand outside of Malaysia on these two subject matters.

The conference was a very beneficial platform as it allowedpeople from different backgrounds i.e from the industry, theregulator and the hall of academia, to discuss, exchangeviews and share knowledge & experiences pertaining to CR& CG.

IIM-SSM CR & CORPORATE INTEGRITY FORUM SERIES

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The IIM-SSM CR & Corporate IntegrityForum Series was a jointly organized bySSM and IIM.

The main objective was to createawareness and enhance the understandingof the concept of CR and corporateintegrity among the corporate and businesscommunity, especially the SMEs, notingthat the SMEs in Malaysia form 99.2% fromthe total number of businessestablishments.

Thus far, two series have been conducted,one in Kuala Lumpur on 18 March 2010 andone in Penang on 16 July 2010.

ADVOCACY – SHARING OF KNOWLEDGE ON CR

SSM advocates CR through the sharing of knowledge via three identified channels:

Advocacy by SSM staff: SSM staff gives lectures & talks during events & conferencesto the members of the corporate and business community, students & academicians:

Advocacy related Activities Date

Public lecture titled “The 21st Century Business Environment:Integrating CG & CR into SMEs”

20 Aug 2009

Lecture on CG & CR at Curtin University‘s Evening Lecture Series 2 Nov 2009

Talk titled “The 21st Century Business Environment: Integrating CG &CR into SMEs”

18 Nov 2009

Talk titled “CG & CR: Reiterating the Basics for Future Sustainability”(at the MICG Director Duties & Governance Conference)

13 Jan 2010

First series of the IIM-SSM Corporate Responsibility & CorporateIntegrity Forum (co-organized with IIM)

18 Mar 2010

Second series of the IIM-SSM Corporate Responsibility & CorporateIntegrity Forum (co-organized with IIM)

16 Jul 2010

Tuanku Ja’afar Law Conference on CG & CR (co-organized with UKM) 19 & 20 Oct 201022

ADVOCACY – SHARING OF KNOWLEDGE ON CR (Cont.)

Training for stakeholders: CR is inserted in the training modules for directors(Corporate Directors Training Program), licensed secretaries (Licensed SecretariesTraining Program) and staff of SSM (Knowledge Enhancement Employee Program).These training programs are conducted by SSM’s training arm; COMTRAC.

Provision of platform to strategic partners: SSM provides platforms to its strategicpartners at its engagement sessions that are held every year, to talk on CR-relatedissues. At present, SSM has three engagement sessions i.e the Corporate PracticeConsultative Forum (that is attended by professional bodies), the Annual Dialogue(that is attended by the business & corporate community) and the BusinessEngagement Chapters (that is attended by trade associations):

Advocacy Related Activities Date

IIM delivered a talk at SSM’s Corporate Practice ConsultativeForum on Corporate Ethics

14 Jan 2010

UNICEF delivered a talk at SSM’s Annual Dialogue titled “TheRole of the Private Sector in Enhancing the Welfare of Childrenin Malaysia

14 & 15 Dec 2009

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PROMOTIONAL DRIVE

SSM has engaged the media to promote its CR-relatedinitiatives, as part of its effort to create awarenessamong the public generally, and the business andcorporate community specifically.

SSM has featured articles on its initiatives in the mediaand has also invited the media to cover the eventsrelating to the CR-related initiatives.

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GLOBAL PRESENCE

To be acknowledged as the driver of CR, SSM aspires tocontribute and make a positive impact not onlydomestically, but also at the international level.

Towards realizing this aspiration, SSM has become amember of CSR Asia since 1 November 2010 with theview to share knowledge, learn from the experiencesand enhance SSM’s expertise.

Apart from CSR Asia, SSM is also planning to be amember of the Centre for Sustainability & Excellence(CSE).

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SSM’S CR INITIATIVES FOR 2011

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National Survey on CR (with UKM)

SME Manual on CR

Best Business Practice Circular – Chief Integrity

Officer (with IIM)

Best Business Practice Circular - Creating a

Child Friendly Environment within the Corporate

Sector (with UNICEF)

CR & Sustainability Workshop

Business Case Studies on Child Care Centres

CR @ Work (CR for SSM’s employees)

Continuous advocacy events

ENHANCING THE DOMESTIC LEGAL & POLICYFRAMEWORK ON CORPORATE RESPONSIBILITY

Various laws relating to CR:Environmental Law

Employment Relations LawConsumer Protection

Labour Laws

Ratified UN Conventions relating to CR:

UN Convention No. 8 (Elimination of Discrimination against Women)UN Convention No. 11 (Children’s

Rights)ILO Convention no. 138 (Minimum

Age)

Bursa Malaysia Listing Requirements – PLCs:

Provide statement on CR activities in Annual Report –Rule 9.25 read together with

Item 29 of Appendix 9C

Khazanah Nasional Berhad – GLCs:

Silver Book: Achieving Value through Corporate

Responsibility

All companies

that are required to

submit annual

returns: To report

voluntarily on CR

activities

CURRENT FUTURE

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THANK YOU

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