Governance and Leadership of public entities (Part 1)

I was invited by the Faculty of Economics and Muamalah Universiti Sains Islam Malaysia (USIM) to share my experience and thoughts on governance and leadership of public entities. This is an important topic given how much public entities influence our life as citizens. 

Throughout my career I had fairly deep involvements with a number of public entities. I was a council member and later the President of the Malaysian Institute of Accountants. I was also a board member of the Malaysian Accounting Standards Board and later the Financial Reporting Foundation. I was the founding Executive Chairman of the Audit Oversight Board and later the Executive Director in-charge of Market and Corporate Supervision of the Securities Commission. My latest involvement in a public entity was when I was appointed the Group Managing Director and Chief Executive Officer of Lembaga Tabung Haji.

In setting the scene for the discussion, I provided the audience with the differences between private business ventures and public entities. Private business ventures, whether individually owned or publicly owned, are primarily driven by maximisation of shareholders value. Although lately the conversation on this topic has significantly shifted towards value creation of stakeholders, profits remain the focus of these entities.

Public entities on the other hand consist of organisations of different structures and shapes depending on how they were established. At the federal government level we have various ministries, government agencies and companies created and controlled by the government, directly or indirectly. In the states, we also have state agencies and state-owned companies which are the extension of the state government and agencies.

Hence, we cannot expect corporate governance principles and structures which are being successfully applied in the private sector to be equally working with public entities. For example, in many public entity structures, the board or its equivalent does not exist. The entities are lead by a director general reporting to a minister. Hence, even if they have independent units such as internal audit, these units report to the director general instead of to an independent audit committee in the private sector.

The governance structure of public entities are dependent on the instrument which created them in the first place. Ministers receive their powers through the delegation of power as provided by our Federal Constitution and specific laws, many government agencies were established by federal laws or state enactments while limited liability companies under the Companies Act, are also used as part of government instruments.

Some of these laws and enactments were enacted many years ago and their provisions could have been outdated due to the changes in our ecosystem and the continuously improving governance practises applied in the country.

The balance between prescriptions and principle-based provisions in these laws and legislations would also share their governance practises. Some principle-based provisions could provide flexibility of their applications. However, this requires people running them to be people of principles and able to determine the appropriate approaches as things are changing. Otherwise, principle-based provisions could be confusing when people are too dependent on their literal interpretations. The same challenge applies to prescriptive provisions.

Their establishing documents set the purpose and functions of public entities. This is very important in differentiating one entity to another. Governance and leadership of public entities should be based on their purpose of establishment and their intended functions as envisaged in their establishing documents.

Next we will explore keys issues in governing public entities.

GameStop: A Distance Observation

When I was with the Securities Commission, one of my responsibilities was to oversee the capital market. This included ensuring all parties in the market such as the stock exchange, brokers and their sales representatives operate in accordance with applicable rules, regulation and expectations. The main objective is to ensure trading is done in a fair and orderly manner to maintain market confidence and to protect investors, especially the retailers.

Last week the investment fraternity was surprised when retail investors in the US ganged up and pushed the price of GameStop when they realised that hedge funds were shorting the counter. The price went up from around an average of USD 18 to somewhere beyond USD 500. Certainly such an upswing would not reflect the improvements of the fundamentals of the company within a short period of time.

Upon some quick research, I noted some interesting facts which behind the battle between the retail community against hedge funds which were considered representing capitalists who did not care about the consequences of their market conducts, as long as they were profitable.

It all started when hedge funds started to short GameStop share due to its weak fundamentals. They borrowed shares mainly from broker dealers and sold them with the idea of buying them at lower prices when the share price drop as what they expected. At the same time, retail investors who were grouping on WallStreetBets, a group at Reddit, started a movement to surprise the hedge funds. They bought shares and options of GameStop to drove the price beyond the expectation.

As the price was moving upwards, the hedge funds were incurring losses and had to buy shares at higher prices to cut loss or to fulfil their obligations with the lenders of the shares under the Securities Borrowing & Lending (SBL) contracts with them. This resulted in more demand for GameStop shares and the price went up further.

Many observers were describing what happened last week as a David vs Goliath episode where the hedge funds were at the losing end and the retailers were victorious. While this could be true in the short term, an unrealistic share price would have to eventually come down. When this happens, those retailers who went to buy the shares towards the peak would find their fingers (and other parts of their bodies and mind) burnt.

It was reported that people who join WallStreetBets were encouraged to "invest" in unconventional manners. One idea which was promoted was to invest in a counter with whatever funds which they had. YOLO - "You Only Live Once", they said. While this could be true, what was not said was, "You may suffer for a long time before you die!"

The Malaysian Securities Commission issued a reminder to investors to be careful with suggestions to ramp up prices of shares as that could breach our securities law. While it was observed that the glove counters on Bursa Malaysia saw price increments, it would not be easy for the GameStop play to happen here.

First, short selling is regulated and limited to specific counters only. Normally, the companies must have sound fundamentals, hence the down side risks is much smaller. Retail investors may have no access to options, which allow them to leverage and bet on share prices.

When there is a sudden surge in share price, Bursa Malaysia will issue a warning which is popularly known as UMA, the short name for Unusual Market Activity. The counter could also be suspended when it breached certain threshold to cool the market and allow investors to reconsider their trading position.

While the number of retail participations on Bursa Malaysia had increased significantly since the Covid-19 pandemic, in similar trend with other markets due to various assistance by governments, the presence of institutional investors remain influential in maintaining market stability. 

I certainly hope that our retail players would do their homework before deciding to be involved with adventures like what happened to GameStop shares. It could be a nice story and narrative but eventually many fingers will be burnt.

A Conversation With MyPAC Students And Alumni

The Malaysian Professional Accountancy Centre (MyPAC) was established to encourage and facilitate students, especially Bumiputera, to pursue professional accountancy qualification. While we have more than thirty thousand accountants registered with the Malaysian Institute of Accountants, the number of Bumiputera accountants in Malaysia is only around 2 two thousand only.

I was a director of MyPAC together with a number of senior partners of the Big-4 before I resigned due to work commitment. The whole idea of MyPAc is to enable students to be globally competitive and attain knowledge, skills and values through passing professional examinations of accountancy body of their choice. MyPAC supports professional programmes of ACCA, MICPA, CAANZ and CPA Australia, amongst others.

Yesterday, I was invited to share my views and thoughts on professional accountancy and governance by a group of MyPAC students and alumni. I originally planned to participate from my orchard in Batang Kali. However, due to movement restriction, I joined the virtual meeting from my home.

I shared my journey in becoming a professional accountant through CPA Australia. After graduating in 1986, I worked in accounting firms in Australia and Malaysia before opening my own accounting practice in mid-90's. The firm was then merged with few like minded friends to establish Khairuddin, Hasyudeen & Razi (KHR) which remains as one of a medium-sized accountancy practice until today. I left the firm in 2005 to establish a strategic advisory company before joining the Securities Commission as a founding Executive Chairman of the Audit Oversight Board.

Governance is a very important part of any company or institution. It is supposed to ensure the company or institution to be governed and managed towards its objectives such have having strategy which was properly crafted and effectively executed. Management is responsible to ensure all aspects of business and operation are in line with the strategy and attain the intended outcomes. Hence, governance is about doing the right thing the right way.

Accountants can be involved in strengthening governance is a number of ways. They can be in the board, lead management or in charge of roles and functions which contribute towards good governance and organisational effectiveness. I was the Chairman of Cagamas Holdings Berhad, the holding company of our national mortgage corporation. As mentioned before, I was in the leadership of the Securities Commission which is tasked to ensure the fairness and orderliness of our capital market. I was also a member of the Operational Review Panel of the Malaysian Anti-Corruption Commission. So I encourage all the young accountants and students to be a significant part of ensuring good governance in Malaysia.

Integrity is also one of the professional values of the accountancy profession. Based on this, professional accountants should a natural partner of any effort to enhance governance. However, one has to ensure that he or she is excellent at the workplace and never compromise on any conduct or behaviour which will taint governance or even breaking the law. With excellence track record as a professional and known for integrity and upholding professional values, one should be able to walk away if pressured to do the wrong thing and secure better position elsewhere. Excellence is important in upholding values and principles.

I was asked many questions including dealing with pressure from outside. My view is simple, just focus on doing the right thing for the organisation and stakeholders. If the organisation is not performing, it would be very difficult to influence others. So, we need to ensure we get the right outcomes for the organisation as part of the ways to deal with various ideas and views from outside which are hard to control. Focus on what we can control.

More than 800 professional accountants had been born from the work of MyPAC. They have more than 200 students at various stages of professional programmes for a number of professional accountancy bodies. Even if MyPAC produces 1,000 Bumiputera accountants, they are already successful in doubling up the number.

The journey is ongoing and there are huge potentials for MyPAC to be an active player in nation building. MyPAC will always have my endorsement and support, InsyaAllah.

Climate Change In Action?

While climate change is quite a main stream issue in continents like Europe, it may not be the same in this part of the world. The common excuse which I heard before is that, "the Westerners had messed up their environment in the past and now they want us to take care of the planet on their behalf".

I was brought up in Kota Bharu which is located at the Kelantan delta. Hence, flood was a common phenomenon since my childhood. We differentiated between flood caused by rain and the real flood which originated from the highlands at the southern part of the state. We could guess whether there would be flooding from the speed of the wind and the direction of the cloud.

However, fast forward 50 years later, Malaysians could not claim that we are free from environmental issues especially from land clearing for various commercial reasons, legal or otherwise. Many popular highlands are no longer as cool as before. Flood is getting more devastating compared to before. However, are we taking climate change seriously?

The Malaysian government is committed to reduce carbon emission by 45% by 2030, a very serious target. The question is whether this aspiration is shared by all of us, Malaysians, and what are our contribution towards achieving this target? Are we distracted by the Covid-19 pandemic or we are simply clueless?

The flood season this year appears to be more serious than before. From the news, there are reports about many houses destroyed, life lost and property damaged. While many of us are starting to talk about the root causes of these calamities, we have to wait whether we as a society will be following up on climate change matters when things get back to normal. 

I have a small plot of land in Batang Kali. The Batang Kali river flows along side this property. When it rains heavily upstream, the river will swell and sometimes can overflow. Just imagine if the volume gets larger due to heavier rainfall and the water level downstream is higher than usual? There could be flooding and the life of people along this river could be affected. What would be the situation 30 years from now?

Perhaps, being exposed to the risk of climate change causes me to appreciate what possibly could go wrong if we do not do anything collectively as the occupier of this planet, our only planet. What about those who are chasing profits and share prices without being bothered whether their conducts and behaviours contribute towards expediting climate change impacts?

It is time for major investors in Malaysia to step up their game to bring climate change issues main stream and send a clear message to corporate Malaysia that they have to start making the difference. 

Celebrating 35 Years of Togetherness

I am thankful to Allah for allowing me and my wife to celebrate our 35th wedding anniversary yesterday. On a Thursday evening 35 years ago, we were solemnised at her home in Kubur Kuda, Kota Bharu.

We met in Perth when we were both students. When I indicated to my friends that I was looking for a girl from Kelantan to be my future wife, I was introduced to her. After courting for a while, we decided to get married in Australia.

I got in touch with my father to convey my intention. He asked me to hang on and finish my study. I told him "if I don't get married, I can't study". Eventually my family conceded but they wanted us to get married in Kelantan. We agreed.

We went through a lot over the next 35 years as husband and wife. Our first son, Abdul Hadi, was born when we were studying at the Western Australian Institute of Technology (now known as Curtin University). Taking care of him when we both had to attend classed was tough. We were lucky that our friends took turn to take care of him.

When we came back to Malaysia in 1986, Malaysia was going through a tough recession. There was graduate unemployment and the government had to come up with a training scheme to employ them at various government agencies with a RM 400 monthly allowance. I started working as a finance person at a Proton dealership in Kota Bharu. Proton cars were selling like hot cakes at that time. Then I went to work in Kuantan with an accounting firm. That was when our second child, Nur Hafizah, was born in Kota Bharu.

We then moved to Kuala Lumpur when I got an offer with another accounting firm. We rented a house in Taman Greenwood. I could only afford to buy a stove and a refrigerator. When my mother in-law came to visit us, she thought that I belonged to a dakwah group and was not fond of worldly stuff. She did not realise our financial situation at that time. We went shopping around Jalan Tun Razak. I still remember of taking a bus where we have to carry our shopping bags while holding the hands of our kids at the same time.

My wife stayed at home and was taking care of our children while I was building my career in accountancy. I founded my own accounting practise in the 90's and went on to take a number of responsibilities at various organisations and institutions. Our family kept on growing with the arrivals of Nur Hanani, Muhammad Hazim, Nurul Aliah and Hanna Yasmin.

Looking back at what we had to go through, I am ever thankful that my wife understood my working demands and provided me with emotional support and encouragements while she herself have to deal with the daily demand at home.

I pray to Allah that we would be together again in heaven.

Recognised By My Alma Mater

I enrolled into the Bachelor of Business (Accounting) degree programme from the Western Australian Institute of Technology (WAIT) in 1984. When I graduated in 1986 the institution was re-named as Curtin University of Technology. Presently, it is known as just Curtin University.

When I completed the Sijil Pengajian Malaysia examination in December 1982, I was told to prepare myself for a placement for the matriculation programme in Australia. I was then offered to go to Kelvin Groove Evening Class in Brisbane. At that time my auntie was studying in WAIT for her accounting degree. I was told by her father that the accounting programme is one of the most practical in Australia.

That started a last minute effort to transfer me from Brisbane to Perth. I was told that I was accepted by Canning College at Bently which was neighbouring WAIT. However, as my ticket was already issued by MARA, I had to pay for the ticket from Sydney to Perth. The Malaysian Consul from Perth, Hussein Ahmad, flew to Sydney to accompany me to Perth.

There were around 40 Malaysian students studying at Canning College. During Fridays we would be performing our Jumaat prayers at WAIT as there were quite a number of Muslim students, predominantly from Malaysia. Hence, I was acquainted very early with WAIT, the institution which I was aiming for to obtain my accounting degree.

We had to sit for the Western Australian Tertiary Examination to be eligible to continue our education at the tertiary level. Before our results we released, we applied to various universities in Western Australia and Eastern states to ensure we secure our preferred programmes. I did not even apply for the accounting programme at prestigious University of Western Australia as I was so convinced about WAIT.

When my results were out, I got a number of offers including from WAIT, the University of New South Wales and Monarch University. However, as I was determined to do the accounting programme at WAIT, WAIT was my choice.

I never regretted that choice as I was introduced to accountancy in a very pragmatic manner. During the first year, we were introduced to the practical part of accounting including preparing various financial reports. As we progressed to the second and third year, we were then introduced to the theoretical part of accounting. Perhaps during that stage we were matured enough to digest the concepts and principles which remain relevant until today.

There were around 10 Malaysian-sponsored students in my batch which did the same course. Only two of us, me and another colleague sponsored by TNB who managed to pass in 3 years. I was so thankful to Allah for his blessings.

Since I left Curtin in 1986, I have not been back to Perth and did not contact the university at all. When I was the Executive Chairman of the Audit Oversight Board, a representative from the university came to see me and we discussed possible ways for me to be involved with its alumni activities. Last year my name was shortlisted to be the Malaysian Alumni of the year. 

Last week Curtin University published an article about my responsibilities at Tabung Haji. It was a well researched article about the role of the Pilgrim Fund in assisting Malaysian Muslims to fulfil their Firth Pillar of Islam, the Hajj. I shared how the education which I had at Curtin and my stay in Western Australia assisted me in building my character and career. I hope the article will inspire many more Malaysians to find their sweat spot in contributing towards nation building.

The article can be downloaded here.

Family Covid-19 Strategy

Many people look forward to the resumption of "normal" life come Monday. There are also people who are concern whether going back to normal would cause more infection of Covid-19.

The debate about "life vs livelihood" under the present circumstances is not limited to Malaysia only. It is a legitimate question, which one should take precedent or can we have both?

Realistically, the Covid-19 pandemic would be around for a while. While staying at home for the past 6 weeks had helped in breaking the chain of infection, many had also lost their income and livelihood shattered. We have no choice but to walk on the tightrope. We need to live with Covid-19 for a while.

Hence, each of us has to take responsibility to take care of ourself, our family and the society. This is where each family has to agree of its own Covid-19 strategy. What to do at home, when using public transport, when shopping and when coming back home? Need to work on the stock of face mask and hand sanitiser as we can't assume they will be provided. What about family activities such as during festivities? 

I trust by taking responsibility, we would be able to deal with both challenges, life and livelihood.

Back On The Governance Circuit

I was invited to be a panellist at a forum which touched on anti-corruption  the week before last. This was the last session at the Governance Convention 2019 organised by Institutional Investors Council and the Securities Industry Development Centre. My co-panellist was Tan Sri Abu Kassim, the Director General of the Governance, Integrity and Anti-Corruption Centre (GIACC) which is leading the fight against corruption in addition to the Malaysian Anti-Corruption Commission (MACC).

Tan Sri Abu Kassim shared key initiatives rolled out by the GIACC to combat corruption including asset declaration by our members of Parliament. He also alluded to the introduction of Political Financing Act, which according to him a very critical component of anti-corruption as politicians have influence and could override systems and processes of public institutions.

I shared few key points with regard to the implementation of section 17A of the MACC Act which will be effective June next year. The new provision would introduce corporate liability to businesses which are involved in corruption unless they are able to demonstrate that they have implemented adequate procedures to prevent corruption.

Corporations and organisation which have high standards of corporate governance would have treated corruption as an evil which they would not be associated with and would be part of their risk management and internal control policies. The effectiveness of section 17A would only make these organisation more focus on the effectiveness of their anti-corruption systems.

On the other hand, any system implemented in organisations would be effective if they are ran by people who have integrity and committed to the highest level of corporate governance. Hence, over reliance on systems and processes without continuous efforts to educate and develop the hearts and minds of people in organisations could also result in surprises.

The tone from the directors from the top must shape the tune in the middle and the tap of the feet on the ground. Management must ensure everybody is dancing to the same song. The the board fails to ensure management and the rest of the corporations to play ball, the risk of corruption and failure of governance would remain high even though there is a new law regarding corporate liability due to corruption.

A corporation operates in a wider ecosystem where external elements can also shape its behaviour especially when competition for business is intense. If there are elements which can misbehave and remain are out of reach from enforcement actions, other elements in the ecosystem would be under pressure to play to the tune. Hence, laws such as section 17A would only be effective if it is enforced without fear or favour and complemented by political financing law which is said would be enacted.

Being back on the governance circuit was something which made me happy. So many things had happened since my last posting on this blog. I pray that I would be able to walk my talk in carrying out the responsibilities which I am now carrying.

Governance And The Modern Society

I was invited to share my views on governance and its importance in a modern society at Masjid Al Iman, Kemensah. This was my second appearance in a masjid to discuss about governance and integrity, topics which are rarely discussed from the societal perspectives in mosques.

Given the audience, I thought it was appropriate to simplify my thoughts into the following points:

• A modern society relies heavily on the services provided by various agencies, organisations and institutions in the public and private sectors such as utilities, education, health and security;

• The quality of leadership, management and governance practices in these organisations would determine the policies and strategies they formulate, the service levels they offer and the prices charged or cost recovered from the public;

• The government is not an alien structure but a representative body elected by the Rakyat to govern and administer our funds, resources and affairs on our behalf;

• Government's funds consist of taxes which we pay, proceeds from our assets which they sold, royalties etc from resources extracted from our lands and borrowings made on our behalf. Hence, if development and operating expenditures are not made prudently, we may need to pay more taxes or government may need to borrow money to pay for these additional expenditures;

• Borrowings by the government involve cost, the interest or financing charges paid. For example, if government's borrowings are RM 100 billion, cost on these borrowings wound be approximately RM 4 billion, which is a huge sum of money and is deducted from the amount otherwise would be spent for the benefits of Rakyat;

• Governance in the public sector is equally important as in the private sector although the Code on Corporate Governance was conceived in 2000 for the application in the capital market;

• Management involves activities and processes to move organisations towards their missions and visions. This include strategy formulation, operations, marketing, financial management, talent management and development as well as compliance with rules and regulation;

• Governance on the other hand is the process to oversee management and the running of organisations and to ensure their objectives are met and risks managed. This involve stewardship, roles and functions of the board, risk management, internal control, assurance and culture;

• While governance and management could involve the application of various systems, processes and policies, their effectiveness is dependent upon the people who are given the trust and responsibilities;

• Corporate governance failures occur not due to the lack of people with knowledge, skills and values required to perform their duties but when they do not have the courage to do the right thing at the right time. Good people simply look the other way when transgressions happen; and

• Doing the right thing requires courage and the willingness to confront the adverse consequences which come with it.

I appealed to the audience to continue to demand good governance for the sake of their children and our future generations.

The AOB 2018 Inspection Findings and Insights

The Audit Oversight Board (AOB) issued its 2018 annual inspection findings and insights for the benefits of the stakeholders last week.

As at 31 December 2018, there are 49 Malaysian audit firms with 338 individual auditors registered with the AOB auditing 1,164 public interest entities.

It was also noted that the capacity of audit firms had increased compared to when the AOB was set up in 2010. The shift in the size of audit forms, assessed by the number of partners are as follows:

Audit firms with2 partners or less has shrunk from 71% in 2010 to only 29% in 2018. With the new registration criteria imposed by the AOB, this category of firm will disappear completely by 2020. This is important as the minimum of partner required to ensure compliance with auditing standards is 3.

Other highlights from the AOB inspection findings for 2018 are:

• For engagements which resulted in satisfactory findings, engagement partners do not audit more than 4 PIEs;
• For audit engagements with satisfactory findings, the Engagement Quality Control Reviewers had at least 8 years audit experience as audit partners;
• Average training attended by audit staff for engagement which resulted in satisfactory findings was more than 70 hours;
• Collective time spent by engagement partners and managerial staff in engagements with satisfactory findings ranged from 11% to 37% of the total time spent; and
• Professional accountancy qualifications is one of the common denominators in audit engagements with satisfactory findings.

For the overall quality control review, leadership responsibilities for quality in audit firms, compliance with relevant ethical requirements and outcomes engagement performance remained as key observations by the AOB.

Another interesting observation is the percentage of income from audit for the major audit firms in Malaysia has shrunk to 66% compared to 71% in 2016. Are these audit firms moving away from audit?

The top 5 findings from AOB's engagement reviews are:

These are audit areas where robust planning, effective supervision and professional judgments are required to be exercised by engagement partners, EQCR and the managers of audit engagements. The appearance of auditor's report for the first time in 3 years could be due to the implementation of the new auditor reporting standards.

The full AOB inspection findings and insights report could be downloaded here:

https://www.sc.com.my/api/documentms/download.ashx?id=741a5db9-949f-4212-bc15-556e1f338b7a

AOB Annual Report 2018

The Audit Oversight Board issued its latest annual report last week.

Amongst the highlights are:

• The AOB was recognised by the Asian Corporate Governance Association as one of the most effective audit regulator and probably the best communicator.
• Introduced new criteria for registration with the AOB where the minimum number of partner has been increased to 3 and attached to a single firm only
• AOB considered the usage of data analytics in audit of public interest entities
• 14 enforcement actions were taken in 2018 focusing on the outcomes of these measures
• Various engagement with local and international stakeholders in enhancing audit quality

The AOB 2018 annual report can be downloaded here:

https://www.sc.com.my/news/publications-and-research/audit-oversight-board-annual-report-2018

Modern Thieves Are More Potent

One of the places where tourists should not miss when visiting Kota Bharu is what I refer to as the Historical Circuit. It is located around Istana Balai Besar, Istana Jahar, Padang Merdeka, Masjid Muhammadi and few another historical sites which define Kota Bharu in the past.

Istana Balai Besar is still being used for official ceremonies such as during the birthday of the Sultan or when new Sultans are proclaimed. It is surrounded by  tall wooden walls which make the interior part to be hidden from the public. There are a number of historical structures around Istana Balai Besar such as old cannons and Bank Pitis. Bank Pitis was the state treasury where the wealth of the state was kept. It is a small strong house built out of bricks and cement. Any thief who wanted to steal the wealth kept inside had to break its door, at least.

Bank Pitis

Stealing in the modern era has changed so much that sometimes the public could be confused by the act and consider it as something honourable. If we follow the reports on how corporations lost their money through corporate scandals, these scandals were structured carefully so that the crimes were hidden until such time where the stolen assets were already distributed around the world and to recover those assets required serious efforts with the cooperations of enforcement agencies from those jurisdictions which could be challenging.

Modern stealing requires brain power and real power. The brain power would device the schemes and the real power such as those held by directors would execute the schemes for themselves or on behalf of those outside the organisations who would eventually benefit from the crime. The schemes could be structured as investments into assets where their prices are highly inflated or as contracts where a huge sum would be contracted out to parties who are part of the schemes. No real goods or services will be provided to the victim organisations. 

Due to the nature of modern thefts, the amount involved had reached into billions, in whatever currencies we talk about. Hence, the impact is much greater compared to, if Bank Pitis was broken into in the old days. It would be easier to track down the thieves of Bank Pitis and the stolen good could be easily identified compared to the lost zeroes in bank accounts of the victims of modern thefts. Worse, some organisations raised bonds before those monies were stolen. So, they ended up with liabilities which have to be repaid over a long period of time.

What could be stolen by modern thieves would make
breaking into Bank Pitis like stealing loose change only

Hence, it is critical for modern organisations to strengthen their internal control and governance processes so that they would not fall victims to these smart and resourceful thieves. Selection of senior management and board members must include integrity assessments, as those who are willing to compromise their integrity could cause huge damages if they decided to turn rouge. 

We should also educate the public that white collar crimes are worse than stealing goats or cows or hard cash, notwithstanding these crooks become donors and give out money to charities and religious organisations. Stolen money should remain as such, stolen money. Don't glorify thieves.

The Mystical Bali

While attending a conference on future competencies of accountants in Bali recently, I took the opportunity to explore Bali which it known for its beauty, culture and mystic.

I stayed at Nusa Dua, a private property where most international hotels are located. The security is tight, which makes you feel safe while enjoying the beauty of its beaches and food. An early morning stroll at the beach will give you the opportunity to enjoy sunrise and the changes of the complexion of the beach as the sun become brighter.

My first port of call was Bali Collection, a 5 minutes walk away from the hotel which I was staying. It gathers various cultural and local products in a very nice and cozy place, suitable for foreign tourists. You need to pay a bit more for the convenience and comfort.

I met Dr. Nur Mazilah, the CEO of MIA who was attending the same conference. We had an early seafood dinner while discussing about the development and issues of the accountancy profession in the region.

After the first day of the conference I, together with few other Malaysian delegates, went to Pantai Kandonganan  to have seafood dinner. This is one of the "must visit" places in Bali to enjoy its fresh and delicious seafood. Some of the food stalls offer cultural shows to their customers. On our way back to our hotels we stopped by a durian stall by the roadside and tried the taste of the King of Fruits, the Bali version.

I purposely took the evening flight out from Bali. That allowed me to spend some time around the mystical island. I hired a car and went to Bedugul, a highland where the famous Candi Kuning and Pura Ulun Danu are located. As our car climbed the hilly road toward Bedugul, I could see a beautiful scenary of the highland and padi fields which provide bountiful supply of food to the Balinese.

Although the weather was getting cloudier as we were arriving at Puri Ulun Danu, it somehow provided me with an interesting photo opportunity. The overcast sky made a very nice background of the temple.

After a quick lunch at a Muslim eatery located at the front at temple and a short stop at the nearby mosque for prayers, we headed back to Denpasar, the capital of Bali where the airport is located. It rained cats and dogs on our way back which prevented me from taking more photos of the beautiful scenery.

Although this was my third time in Bali, there are more places to be discovered. Bali offers an opportunity for visitors to observe tolerence and understanding as people from various beliefs and backgrounds congregate to make their leaving or enjoy the beauty of this mystical and beautiful island. If we view things from the lenses of humanity, we would find less reasons for conflicts and hatred. That is what you will bring back from Bali.