According to KPMG’s Kasturi Nathan, Head of Governance & Sustainability in Malaysia, and Krishman Varges, Manager, Governance & Sustainability in Malaysia, Directors must possess a strong moral compass and call for action in the event of potential conflicts of interest. Recent events such as the appointment of an e-commerce and a fashion line owner to the board of a public university has brought the issue on conflict of interests concerning directors to the center stage of corporate polemics.
An analysis performed by KPMG across a total of 1,062 non-executive directorships in the top 150 public-listed companies by market capitalization revealed there are 50 common directorships which relate to competing companies within the same sector. To put the same point differently, for every three companies, there will be one nonexecutive director who holds a directorship in a competing company.
In order to bring about a more tangible change in relation to the governance on conflict of interest, there must be some positive actions to clearly identify the perceived conflict and to suggest a course of action to limit the possible damage, say Kasturi and Krishman.
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