Governance, SME and the accountancy profession. A conversation on Awani Review.
Posted by Awani Review , 2018:
Accountant Nik Hasyudeen: Stand up to account for the sake of good corporate governance
The Malaysian corporate sector has been found less than accountable and taken a beating in the practice of good corporate governance in recent years. Awani Review’s Ibrahim Sani asks Nik Hasyudeen, the founder of Inovastra Capital how we can fix this and get accountants to account.
In the Malaysian accounting scene, Nik Hasyudeen is a household name. Having been around for over four decades, he has helped shaped the Malaysian accounting framework. He has done this, from his time as the President of the Malaysian Institute of Accountants (MIA), to his various appointments to the board of directors of Bank Islam, Cagamas, and many more.
“After this much time spending in accounting, I have gone slightly philosophical when it comes to this discipline” stated Hasyudeen.
He says that practitioners must understand better what this profession mean to them, and to the society at large. “The profession itself has to redefine its role on how to stay relevant in the future” declared Hasyudeen. “They must ask themselves what makes them accountable when being accountants. The word accounting bears the term accountability. Therefore how much accountability have we practiced in the world of commerce?” asks Hasyudeen.
“Good corporate citizenship is an outcome, not just a process. Companies must share their vision and match what they do everyday with their vision” he added.
“I’ve had the pleasure to speak to Andrew Fastow, the former CFO of Enron. He addressed this pertinent question: ‘If a company announces that they will comply to every single regulation, what would happen to the share price?’. Fastow reckons that share prices of such companies would go down because Fastow argues this is because customers and investors expect companies to capitalize and maximize opportunities regardless of the business regulations in place” Hasyudeen recollects.
In this regard, Hasyudeen says that the problem of not having good corporate governance is not just an issue with the company alone, but investors and customers must play that important role of wanting to do good to the world.
Because of this, he ponders on how can he use his experience to help the Small and Medium-sized Enterprises (SME). “They need not be good at everything, this is where I come in. I advise them on having good practices and governance. Good financial management, and more”.
“Where are they (the SMEs) positioning themselves in the marketplace? We are looking at companies that have found their place in the marketplace and look at growing them even further” he quipped.
Watch the full interview with Nik Hasyudeen, as Ibrahim Sani asks more on his thoughts about the SME sector, and why this part of his work lends more optimism in the Malaysian business landscape.