The Malaysian Institute of Corporate Governance says that SME’s keen to find a bigger role in the challenging business eco-system, should take note of the changing landscape and pay attention to good governance guidelines being adopted by the bigger companies. This is mainly due to the supply chain ecosystem these large corporations appoint who are SME’s will eventually impact their own guidance.
IF they are to comply with regulations put it place by local authority or foreign policies especially in ESG, partners and vendors will be audited and chosen based on their competence in this area. “Good governance is not just for the big players,” said Mr. Berry Chairman at MICG “it extends to all organisations operating in Malaysia, regardless of size and market capitalisation, and includes SMEs.” The present economic environment has been a challenging period for all businesses, many businesses have had to grapple with a steep learning curve as they embrace digital technologies to ensure sustainability in anticipation of the Fourth Industrial Revolution era. The Government and Financial sector have also given a variety of incentives to assist with the continued growth of the SMEs. However, progressing in business should not come at the cost of sacrificing good governance which encompasses ethics and integrity claimed MICG.
Datin Seri Sunita Rajakumar from Climate Governance Malaysia called on how climate change is both a risk and a threat, and can impact more than just people’s health and safety. She urged SMEs, as the backbone of an MNC’s supply chain, to understand and comply with the global Environmental, Sustainability and Governance (ESG) standards and to build their own systems. Climate change may challenge the financial viability of many businesses, and managers and owners of businesses will have to face the consequences of their business judgements.
The pandemic has given time for many to reflect, for the business community its possibly the best time to reset and relook on how the business has been delivering and impacting on the larger environmental ecosystem. Profits should not be the core motif and adhering to ESG guidelines should not be for reasons of avoiding punishment. SME’s must be willing and embrace these policies, as they should realise they play an important role in keeping our planet safe and healthy.