Managing International Career on Colgate-Palmolive Corp.

Colgate-Palmolive:

How To Manage International Career

Comparative study on Managing International Career

By: Azman Muammar, B.Eng.

 

CP was a leading consumer product company with product brand were offered such as colgate toothpaste, Palmolive dishwashing liquid, Ajax cleanser, Irish spring soap and Hill’s science diet pet food.

 

The company were also recognized as its outstanding approach to manage international career development. By 1993, it had 170 expatriates in key management positions all over the world. International experience was considered as important matter to career development, and virtually a requirement for anyone aspiring to senior management.

 

However, increasing number of talented young manager were becoming reluctant to international assignment, because of their spouse rejected to move outside US as they had careers of their own and couldn’t easily move abroad. Therefore, management at CP were thinking carefully about whether to adjust their approach toward international career development.

 

Why international assignment is important for CP?

 

According to their improvement in sales all over the world, international office contribute significance number of total sales comparing to US market.

 

In 1928, after merger process they started to expand abroad.

By 1930, the firm had subsidiaries in several European countries, as well as in Argentina, Brazil, India, Mexico, south Africa, and Philippines.

By 1961, CP’s product were sold in 85 countries around the world. By that year, they book increasing activity in sales by growing it 53% of total company sales and accpunted for 78% profit.

During 1970s, CP undertook series of acquisitions and became more diversified company, shown by revenues grew up to $4,9 billion until 1984.

During 1970 and 1980’s, it acquired and divested in several companies and continued to find new subsidiaries in latin America, Africa, and asia, including several populous country.

In 1992, CP acquired Mennen, a private firm best known for its line of deodorant product.

However, international sales were more important than ever, and for several market like Europe, it contributed 27%, latin America 21 % and asia-africa 17%. What’s a big number!

 

Managing international Expansion

 

Actually, CP had consistenly taken a measured approach toward entering foreign market. They start by import its product first and then if sales were strong, CP would set up country subsidiary and begin manufacture locally. New subsidiary were runned by experienced manager, sent in from CP headquarter or from other subsidiaries.

 

In earlier, CP initially organized its activities on a country by country basis, with each foreign subsidiary reporting directly to corporate headquarters. But, with increasing global competition in consumer goods and urgen needs on worldwide coordination and shifted away from strictly geographic approach, then CP introduced new unit, called Global Business Development, which was created as global headquarter, gathering consumer and competitive information, developing global strategies, assessing opportunities and risk around the world, and transferring knowledge among countries.

 

As growing business again, CP organizational structure were described geographically, with the president of four major regions, North America, Europe, Latin America, and asia pacific dan they should report to COO (chief of operational officer).

 

The Role of Expatriate Manager

 

CP had its manager dispatched to new market all the world. Their expatriate manager after several times worked in one country then moved to antother country , transferring their expertise and helping to disseminate CP’s management approach.

Once in the foreign country, expatriate manager had to do their best job and adapt to local conditions, and sometimes diet, climate and standard living were often very different from what they were used to.

 

Several problem that they had to face are:

1. differences in cost of living

In earlier fase, some foreign assignment were not attractive as manager feared financial sacrifice and    conversely, other assignment became attractive as a way to save money rather than for merits of the job.

1. pension planning

the manager not become fully vested for pension purposes in any one.

 

Then, toward this kind of problem, company decided to establish a single corporate policy regarding international assignment. The aims is to have some consistency in structure and expatriate policy.

 

Colgate-Palmolive’s international assignment policy

 

The policy was developed to provide standardized set of procedures and entitlements for its expatriate managers. The policy itself was intended to be progressive, comprehensive, and sensitive to employee and family needs.

 

The employees were shifted to US status and considered to be an American employees for purposes of pension and benefits.

 

The policy had several important component:

1. prior accepting an overseas assignment , managers were allowed to take 5-days trip, with expenses paid, to visit assignment location.
2. Upon acceptance assignment, manager and his spouse were offered  language courses at company expenses
3. Medical examination also provided
4. While overseas, CP will reimbursed the cost of private school tuition for the children 4-19 years.
5. Employees also received annual home leaves so they could return to their home country for an extended visit each year.

 

Several policy were made to ensure that expatriate managers had a similar level of  disposable income as their counterpart did at corporate headquarter.

In addition, the company paid for moving and relocation expenses at the beginning and the end of the assignment, provided relocation allowance, paid temporary living expenses upon arrival and protected employees against loses in real estate transaction.

 

Basically, company was trying to address wide range of concern, both personal and financial.

 

Profile of Colgate Palmolive’s Expatriate Managers

 

Manager who were choosen for international policy if they had distinguished themselves in their initial assignment and were judged to be of high potential person.

After they can accomplish their job in three to five years in one expatriate position, the manager might be offered a new positions in antoher country, either as promotion or as rotation.

 

The problem that often occur regarding to the policy was:

1. common concern had to do with host country’s religion or social practices, its language, or with matters of health and safety.
2. Family reason

 

Improvement to solve the problem

 

According to survey that had been conducted in order to gain more information why most of talented manager didn’t want to get international assignment, the research shown that:

1. great majority of of employees found that international assignment policy fair and comprehensive.
2. They are suggested that more to be done in preparing expatriates and their families prior going abroad.
3. Many employees put dissatisfaction on the issue of spouse employment, complaining that their spouses were not allowed to work in foreign country or they can’t find suitable employment in their chosen professions.

 According to result, company response to make orientation program to help expatriate and families anticipate cultural differences and personal stresses they might be find when living overseas.

Also, they came out with program, called the spouse assistance program.

 

The spouse assistance program

The program were initiated to help spouses assess and achieve the transition to foreign location.

1. program endeavor to help informing employees and spouses of the career development opportunities overseas
2. provide networking assistance through their membership to find new career opportunity.
3. Spouse reimbursement account

This account were created to assist a spouse in locating job for continuing a career overseas, company will provide reimbursement account equivalent to $7,500 usd

 

1. Tuition reimbursement

Tuition reimbursement were provided to support spouses who pursue career related skill and competency  development overseas.

 

Instead of giving spouse assistance program, CP also provide another program and facilities, such as:

1. Tax equalization
2. Goods and service
3. Housing
4. Relocation to the assignment location
5. Sale or rental the principal residence
6. Relocation allowance
7. Children education reimbursement
8. Vacation and Leave
9. Home leave
10. Post allowance
11. World opportunity

 

 

Critical Point

 

The policy is designed, of course, to support the success of the business by facilitating the placement of skills in the global environment.  It is the employee who takes responsibility for the success of his assignment, but in order to ensure professional success, the policy also seeks to accommodate family interests in consistent and equitable ways.  Employees, who are identified as having high performance and potential, have various opportunities to go beyond the National boundaries and make a mark at the international level.  There are plenty of examples of employees who have moved to Divisional/Global assignments and successfully delivered business results.  Opportunities are available in each and every function.

 

1. Strong points –

 

This policy is governed by some well-defined principles, of which the following are some of the most important, namely: Fairness: the fair treatment of the family, recognizing their contribution to the success of the assignment. This particularly applies to the educational needs of the children and the disruption of dual careers. In this respect there is a clear “partner assistance program”

 

1. Weakness –

Picking up the wrong candidate for an international assignment, a costly lesson for both the individual and the company.  So more and more companies turn to test techniques like Overseas Assignment Inventory that allows a company to compare a candidate against a profile of success based on a study of thousands of international managers. Also, Assignment is use to fill the skill gap.

Sometimes, the certain position is designated to expatriate only.  It’ll exclude the  local candidate with a good capacity for that position.

 

When an MNC (Multinational Corporation) designs a policy regarding international career development, they might have the following consideration in advance:

 

1. make decentralized management style to exercise great autonomy.
2. Use expatriate managers with functional managing experiences to lead the local employees and operate their subsidiaries.
3. Provide expatriates with consistent and equitable treatment such as pension, benefits and reimbursement for overseas assignment.
4. Measure the cost spending on housing, moving, settling in, children education reimbursement, temporary living expenses, home leave, etc.
5. Consider the expatriates’ spouses’ income replacement in dual-career families.

 

 

Case source: Harvard Business Review

Reviewer: Azman Muammar

 

Tips Jika Hendak Tinggal di Negeri Non-Muslim

Syarat Tinggal di Negeri Non-Muslim

Saya (Syaikh Muhammad bin Shalih Al Utsaimin) katakan, bepergian ke negeri non-muslim tidak

diperbolehkan kecuali telah memenuhi tiga syarat:

1.       Hendaknya seseorang memiliki cukup ilmu yang bisa memelihara dirinya dari syubhat.

2.       Hendaknya memiliki agama yang kuat unutk menjaga agar tidak terjatuh dalam syahwat.

3.       Hendaknya ia benar-benar berkepentingan untuk berpergian.

Bagi yang belum bisa menyempurnakan syarat-syarat di atas tidak diperbolehkan pergi ke negeri kafir,

karena hal itu akan menjatuhkan dirinya ke dalam fitnah yang besar dan menyia-nyiakan harta saja.

Jika ada suatu keperluan seperti berobat, mempelajari ilmu yang tidak ditemui di negeri asal, maka hal itu diperbolehkan dengan catatan memenuhi syarat yang saya sebutkan di atas.

Adapun masalah rekreasi ke Negara kafir, bukanlah suatu kebutuhan, karena ia bisa saja pergi ke

negara Islam yang menjaga syariat Islam.

Adapun masalah tinggal atau menetap di negeri kafir sangatlah membahayakan agama,

akhlaq dan moral seseorang.

Bagi yang akan menetap di negeri tersebut, ada dua syarat utama :

Pertama : Merasa aman dengan agamanya.

Maksudnya, hendaknya ia memiliki ilmu, iman dan kemauan kuat yang membuatnya tetap teguh dengan agamanya, takut memyimpang dan waspada dari kesesatan. Ia harus menyimpan rasa permusuhan dan kebencian terhadap orang-orang kafir serta tidak sekali-kali setia dan mencintai mereka, karena setia dan mengikat cinta dengan mereka bertentangan dengan iman.

Firman Allah:

“Kamu tidak mendapati kaum yang beriman kepada Allah dan hari akhir berkasih sayang dengan orang-orang yang menentang Allah dan rasulNya, sekalipun orang-orang itu bapak-bapak, atau anak-anak, atau saudara-saudara, atau keluarga mereka.”(Al Mujaadilah : 22)

Dalam sebuah hadits shahih Nabi Shlallahu Alaihi Wassalam bersabda :

 “Sesungguhnya barang siapa yang mencintai suatu kaum , maka ia tergolong dari mereka, seseorang selalu bersama dengan orang yang ia cintai.”

Di lain kesempatan, Nabi bersabda : “Barang siapa mencintai suatu kaum, maka ia tergolong dari mereka .”

Kedua: Ia mampu menegakkan dan menghidupkan sy’iar agama ditempat tinggalnya tanpa ada penghalang.

Ia bebas melakukan sholat fardhu, shalat jum’at, dan shalat berjama’ah jika ada yang diajak berjamaah

dan jum’at, menunaikan zakat,puasa, haji, dan syiar Islam lainnya.

Jika ia tidak mampu melakukan hal di atas, maka tidak diperbolehkan di negeri kafir. Karena dalam keadaan seperti ini wajib baginya hijrah dari tempat seperti itu.

Ketiga: Ia tinggal sebagai duta bangsa atau kepentingan diplomasi di negeri kafir, seperti menjadi pegawai di kedutaan, maka hukumnya tergantung tujuannya.

Seperti atase kebudayaan yang bertujuan memantau dan mengawasi para pelajarnya di negeri non-muslim agar mereka tetap komitmen terhadap agama Islam, baik dari segi akhlak maupun moral. Dengan demikian tinggalnya di tempat tersebut mendatangkan maslahat yang sangat besar dan mampu mencegah kerusakan besar yang akan terjadi.

Keempat: Ia tinggal untuk kepentingan pribadi seperti berdagang dan berobat, maka diperbolehkan baginya tinggal sebatas keperluan yang ada dan sebagian ulama ada yang membolehkan tinggal di negeri kafir untuk tujuan berniaga berdasarkan sebuah atsar dari sebagian sahabat.

Kelima: Ia tinggal untuk tujuan belajar. Ini seperti bagian sebelumnya yaitu tinggal untuk suatu keperluan , tetapi ini lebih berbahaya dan lebih mudah merusak aqidah dan akhlak seseorang.

Karena biasanya seorang mahasiswa merasa rendah diri dan menganggap tinggi ilmu pengajarnya, sehingga dengan mudah ia terpengaruh pemikiran , pendapat, akhlak dan moral mereka. Selanjutnya ia mengikuti mereka kecuali orang-orang yang dikehendaki dan dilindungi Allah. Dan ini sangat sedikit jumlahnya. Selanjutnya mahasiswa atau pelajar biasanya selalu membutuhkan pengajarnya yang akhirnya ia terikat dengannya dan membiarkan kesesatan karena kebutuhan pada gurunya. Lalu di tempat belajar ia biasanya memerlukan teman bergaul. Ia bergaul dengan sangat akrab satu sama lain serta saling mencintai.

Karena bahayanya itulah hendaknya ia lebih berhati-hati.

Bagi pelajar yang ingin tinggal di negeri non-muslim, disamping memenuhi dua syarat yang disebutkan diatas,

ia harus memenuhi syarat-syarat di bawah ini:

1.       Seorang yang hendak belajar memiliki kematangan berfikir, bisa memisahkan antara yang bermanfaat dan yang mudharat serta berwawasan jauh ke depan. Adapun pengiriman para pemuda belia yang masih dangkal pemikirannya, maka hal itu sangat berbahaya bagi aqidah, akhlak dan moral mereka, juga berbahaya bagi umat Islam.

 

2.       Seorang yang mau belajar hendaknya memiliki ilmu syari’at yang cukup, agar ia mampu membedakan antara yang benar dengan yang batil, mampu mencerna dan menghindar dari kebatilan agar ia tidak tertipu olehnya sehingga menyangka hal tersebut benar, atau merasa ragu dan kabur, atau tidak mampu melawan kebatilan tersebut, akhirnya menjadi bimbang atau hanyut oleh arus kebatilan.

 

3.       Ketiga: Hendaknya seorang yang mau belajar memiliki agama yang kuat sehingga bisa membentengi diri dari kekufuran dan kefasikan. Sebab orang yang lemah agamanya tidak mungkin selamat untuk tinggal di negeri kafir tersebut, kecuali yang dikehendaki Allah. Hal itu dikarenakan kuatnya serangan dan pengaruh, sementara yang bersangkutan tidak mampu mengadakan perlawanan.

 

4.       Ia belajar untuk mengkaji ilmu yang sangat bermanfaat bagi umat Islam yang tidak ditemukan dalam sekolah-sekolah negeri mereka. Jika ilmu tersebut kurang bermanfaat bagi umat Islam atau bisa didapat dalam sekolah-sekolah negeri mereka, maka tidak diperbolehkan tinggal dinegeri tersebut untuk tujuan belajar.

 

5.       Ia tinggal di negeri kafir untuk selamanya sebagai penduduk asli, ini lebih berbahaya dari yang sebelumnya, karena kerusakan akibat berbaur dengan orang-orang kafir. Ia akan terpengaruh dengan adapt kebiasaan orang kafir dalam mendidik dan mengarahkan keluarganya yang mungkin akan mengikuti aqidah dan cara ibadahnya. Oleh karena itu Nabi bersabda: “Barang siapa berkumpul dan tinggal bersama orang yang musyrik, maka ia akan seperti mereka.” Hadits ini walaupun dha’if dalam sanadnya tapi isinya perlu medapatkan perhatian. Karena kenyataan berbicara, orang yang tinggal di suatu tempat dipaksa untuk menyesuaikan diri.

Syaikh Sholih bin Muhammad AlUtsaimin dikutip dari

buku penjelasan tiga landasan utama hal 222-231 (ai/aos

Diambil dari WEBSITE:www.pmij.org

 

Kiat Praktis Dakwah Fardiyah

source: Warung Gaul Timur Jauh

 
Merekrut manusia ke jalan Allah SWT. merupakan amaliyah yang mahal. Hal ini bisa dilakukan dengan berbagai macam cara, di antaranya melalui dakwah fardiyah.

 

Banyak pengalaman orang lain dalam merekrut orang melalui dakwah fardiyah. Terkadang memang melakukan dakwah fardiyah memerlukan kiat tersendiri. Berikut ini kiat praktis dakwah fardiyah sebagaimana yang dipaparkan Syekh Mustafa Masyhur dalam bukunya Fiqhud Dakwah. Kiat-kiatnya sebagai berikut:

 

Langkah Pertama:
Berupaya untuk membina hubungan dan mengenal setiap orang yang hendak didakwahi dan membangunnya dengan baik. Upaya ini untuk menarik simpati darinya agar hatinya lebih terbuka dan siap menerima perbincangan yang dapat diambil manfaat sehingga pembicaraan berikutnya dapat berlangsung terus. Pembinaan hubungan dengannya dilakukan secara intens sehingga obyek dakwah mengenal orang yang mengajaknya sebagai orang yang enak untuk berteman dan berkomunikasi.

 

Langkah Kedua:
Membangkitkan iman yang mengendap dalam jiwa. Pembicaraan hendaklah tidak langsung diarahkan pada masalah iman, namun sebaiknya berjalan secara tabi’i, seolah-olah tidak disengaja dengan memanfaatkan moment tertentu untuk memulai mengajaknya berbicara tentang persoalan keimanan. Melalui pembicaraan yang tabi’i persoalan yang dipaparkan akan mudah mendapatkan sambutan. Dari sambutan yang disampaikannya mengenai beberapa hal dapat ditindak lanjuti dengan meningkatkan gairah keimanannya. Gairah keimanan yang timbul darinya akan mencari solusi atas permasalahan yang dihadapinya. Dari situlah muncul perhatian yang besar terhadap masalah-masalah keislaman dan keimanan.

 

Langkah Ketiga:
Membantu memperbaiki keadaan dirinya dengan mengenalkan perkara-perkara yang bernuansa ketaatan kepada Allah dan bentuk-bentuk ibadah yang diwajibkan. Pada tahap ini perlu pula dibekali dengan bahan-bahan bacaan dari referensi yang sederhana, seperti Dasar-dasar Islam, Prinsip-prinsip Islam (Abul ‘Alaa Al Maududi) dan lain-lainnya. Di samping bekalan bahan-bahan bacaan juga perlu diperkenalkan dengan lingkungan yang baik dan komunitas masyarakat yang shalih agar dapat menjaga nilai-nilai yang telah tertanam dan meneladani kehidupan orang shalih. Mutabaah dan pemantauan dalam tahap ini memerlukan kesabaran yang tinggi sehingga dapat membimbing perjalanannya di atas jalan dakwah dan terhindar dari faktor-faktor yang buruk.

 

Langkah Keempat:
Menjelaskan tentang pengertian ibadah secara syamil agar memiliki kepahaman yang shahih tentang ibadah disertai niat yang benar dan berdasarkan syara’. Pemahaman yang tidak sempit terhadap ibadah. Ibadah bukan sebatas rukun Islam yang empat saja (shalat, puasa zakat dan haji). Akan tetapi pengertian ibadah yang luas sehingga memahami bahwa setiap ketundukan seorang hamba pada-Nya dengan mengikuti aturan yang telah digariskan akan bernilai ibadah.

 

Langkah Kelima:
Menjelaskan kepada obyek dakwah bahwa keberagamaan kita tidak cukup hanya dengan keislaman diri kita sendiri. Hanya sebagai seorang muslim yang taat menjalankan kewajiban ritual, berperilaku baik dan tidak menyakiti orang lain lalu selain itu tidak ada lagi. Melainkan keberadaan kita mesti mengikatkan diri dengan keberadaan muslim lainnya dengan berbagai macam problematikanya. Pada tahap ini pembicaraan diarahkan untuk menyadarkan bahwa persoalan Islam bukan urusan perorangan melainkan urusan tanggung jawab setiap muslim terhadap agamanya. Perbincangan ini dilakukan agar mampu mendorongnya untuk berpikir secara serius tentang bagaimana caranya menunaikan tanggung jawab itu serta menjalankan segala tuntutan-tuntutannya.

Langkah Keenam:
Menjelaskan kewajiban untuk mengemban amanah umat dan permasalahannya. Kewajiban di atas tidak mungkin dapat ditunaikan secara individu. Masing-masing orang secara terpisah tidak akan mampu menegakkannya. Maka perlu sebuah jamaah yang memadukan potensi semua individu untuk memperkuat tugas memikul kewajiban berat tersebut. Dari tahap ini obyek dakwah disadarkan tentang pentingnya amal jama’i dalam menyelesaikan tugas besar ini.

 

Langkah Ketujuh:
Menyadarkan padanya tentang kepentingan sebuah jamaah. Pembicaraan ini memang krusial dan rumit sehingga memerlukan hikmah dan kekuatan argumentasi yang meyakinkan. Oleh karena itu harus dijelaskan padanya bahwa bergabung dengan sebuah jamaah harus meneliti perjalanan jamaah tersebut. Jangan sampai terburu-buru untuk menentukan pilihan terhadap sebuah jamaah yang akan dijadikannya sebagai wahana merealisasikan dasar-dasar Islam.

Demikianlah langkah-langkah dalam melaksanakan dakwah fardiyah sebagaimana yang dijelaskan oleh syekh Mustafa Masyhur. Selamat mengamalkan, semoga Allah SWT. memudahkan kita membimbing manusia ke jalan-Nya. Amin.

 

 

Corporate Governance:An International Perspective Compare to Canada, Indonesia and Taiwan

 Prepared By

Azman Muammar, Timothy Ross O’Connor, Pin Pin Liu.

There has been considerable interest in the corporate governance practices of modern corporations.  The notorious collapse of Enron in 2001, one of America’s leading companies, has focused international attention on company failures and the role that strong corporate governance needs to play to prevent them.  Countries around the world are instigating far-reaching programs for corporate governance reform, as evidenced by the proliferation of corporate governance codes of policy documents, voluntary and mandatory, both at the national and supra-national level (Solomon, 2007, p.25).  

Corporate governance sets out the processes by which companies are directed and administered.  It defines the particular rules and procedures through which corporate decisions and objectives are set and monitors whether outcomes are in agreement (Solomon, 2007, p.1).  Corporate governance is key in motivating the company towards the fulfillment of its collective goals without being offset by problems associated with conflicts of interest within the firm.           

Corporations are intended to effectively pursue the interests of their owners.  The greater the separation of ownership and control, the higher the possibility of increased agency costs.    Agency costs arise when those assigned to act on behalf of the shareholders, such as executives and senior managers, fail to do so effectively because of competing interests.  Systems of corporate governance are therefore intended to align these interests by governing the relationships between the concerned parties. Directors and management are responsible for initiating a model of corporate governance, which aligns the interests of corporate members, as well assessing this model’s effectiveness often.  When conflicts of interest occur, senior executives should behave honestly and ethically and must acknowledge the rights of shareholders (Solomon, 2007, p.17).  They may facilitate the exercising of these rights by communicating vital information in an understandable and assessable fashion.The Board of Directors should be required to have an array of expertise in order to manage a variety of business matters.  They should also be able to evaluate and oppose management’s performance.  The Board must be of an appropriate size and have a functioning mix of executive and non-executive members (Solomon, 2007, p.17).  Finally, the same person should not hold both the vital positions of Chairperson and CEO. Organizations should take steps to independently verify the reliability of the company’s financial reporting and should supply the shareholders with information concerning the responsibility and accountability of corporate members (Solomon, 18).

Traditionally, shareholders were primarily individual investors, such as wealthy businessmen, who had vested interests in the dealings of the companies they owned and hence exercised more control over them (Solomon, 2007, p.23).They hired and fired the President/CEO, elected the Board of Directors, which in turn hired and fired senior management, and kept a diligent eye on corporate affairs and the activities of key executives.           

Eventually, the separation of ownership and control became more pronounced.  Markets grew to be more institutionalized.  Now stock traders tend largely to be institutions such as mutual and pension funds, investor groups and banks (Solomon, 2007, p.23).  Consequently, investor’s interests are less frequently connected to the fortunes of individual corporations, and hence, investors tend to have less concern for any particular company’s corporate governance.When institutional investors disapprove of the President/CEO’s actions and believe their dismissal would be resource consuming, they often simply sell off their shares (Solomon, 2007, p.24).  As there is often little objection, the President/CEO in this case can bestow upon him/herself the Chairman of the Board position, which makes him/her especially difficult to get rid of. Such an environment has come with a simultaneous lapse in the oversight of large corporations.  The President/CEO now typically appoints his or her friends and business associates to the Board of Directors independent of shareholder concern (Solomon, 2007, p.24). 

Between 2000 and 2002, the U.S. saw a series of large-scale corporate accounting scandals, which dramatically shook investor confidence in securities markets.  When the share prices of the corresponding companies fell, investors lost billions.  The infamously fraudulent activities of Enron, Tyco, and WorldCom exposed major problems with conflict of interest and incentive compensation practices.  Specific factors contributing to these failures included boardroom failures, auditor conflicts of interest, banking practices, and executive compensation (Keasly, 2005, p.151).The aforementioned scandals in the U.S. spawned calls for increased oversight and regulation of corporate practices.  Responsibility to do so fell on the Securities and Exchanges Commission (SEC), a federal commission created to regulate the securities markets. Its statutes intend to promote full public exposure and to protect investors against fraudulent and manipulative practices in the securities markets (Keasly, 2005, p.152).On July 30, 2002, the Securities and Exchanges Commission enacted the Sarbanes-Oxley Act in an attempt to both restore investor confidence and combat corporate mischief (Keasly, 2005, p.152).The legislation established new or enhanced standards for all American public company boards, management and public accounting firms.  It requires the SEC to implement rulings on requirements to comply with the new law.  The act also established a new quasi-public agency, the Public Company Accounting Oversight Board (PCAOB) to oversee, regulate and discipline accounting firms in their roles as auditors of public companies.  The act further covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure (Keasly, 2005, p.154).The Sarbanes-Oxley Act commands that there be a set of internal procedures intended to supply truthful disclosure.  An “internal control report” is required along with each annual Exchange Act and it must be confirmed that, “it is the responsibility of the management to “establish and maintain an adequate internal control structure and procedures for financial reporting” (Keasly, 2005, p.176). Above this, external auditors are obliged to provide a judgment on whether effective internal controls over financial reporting were upheld (Keasly, 2005, p.176). Additionally, it makes the CEO or CFO accountable for “certifying the integrity” of these reports as well as the corporate tax return.The Sarbanes-Oxley Act allows for harsher penalties for fraudulent or manipulative practices with regard to financial reports or external investigations while providing better protective measures for whistle-blowers (Keasly, 2005, p.176).  Overall, it requires companies avoid granting loans to management, maintain a greater independence from their external auditors, and to adopt more accountable, transparent, and accurate financial reporting methods as well as control procedures (Keasly, 2005, p.177). 

Corporate Governance of public Canadian companies are regulated by both corporate and security laws and is the responsibility of the corresponding provincial or territorial governments coordinated through the federal Canadian Securities Administrators (CSA) (McDermott, Farrel, 2005, p.53). As most of Canada’s largest companies are traded on the Toronto Stock Exchange (TSX), the Ontario Securities Commission is generally regarded as the lead securities authority (McDermott, Farrel, 2005, p.54).          

These authorities recommend the non-prescriptive approach to governance.  This is more akin to the system found in the U.K, other wise known as the “comply or explain” code of corporate governance. Publicly listed companies in Canada must either comply to the codes set forth, or explain why they haven’t complied with them.  This approach is influenced by the small size of Canadian markets; the large number of small-cap public companies; relatively concentrated ownership; and privileged access to U.S. markets.  The Canada-U.S. Multi-jurisdictional Disclosure System allows Canadian companies to access American markets using Canadian disclosure documents without being subject to American domestic reporting regulations (McDermott, Farrel, 2005, p.56).

Securities regulators in Canada have responded to recent developments in the U.S.  Because of the desire to keep investor confidence, the CSA has introduced new rules and policies tightly following those found in the Sarbanes-Oxley Act.  The new regulations include: the oversight of external auditors, CEO certification with respect to the accuracy of public disclosure statements and internal control over financial reporting; authority and responsibility of audit committees, appointing, overseeing the work of, and compensating external auditors; adopting a charter setting out responsibilities and procedures of the Board of Directors; adopting a written code of ethical business conduct; having a majority of independent board members; reviewing public disclosure of financial information; and establishing procedures for dealing with complaints with respect to auditing, accounting, and whistle-blowing(McDermott, Farrel, 2005, p.61).  The Ontario government has additionally increased the maximum penalties for securities law offences while the federal government followed suit with amending the criminal code to impose penalties for insider trading and threatening whistle-blowers (McDermott, Farrel, 2005, p.69).The new CSA Rules bear a resemblance to the guiding principles contained in the Sarbanes-Oxley Act in the U.S. – the main point of difference being the non-prescriptive qualities inherent in the Canadian initiatives. 

Economic crisis that hit Indonesia since August, 1997 has taught hard lesson. Indonesia is one of the biggest country in the world which has a lot of job to be done in term of Corporate governance. Since earlier stage after economics’ crisis, government tried to convince again with high efforts to implement good corporate governance. Many efforts are being done to introduce corporate governance in Indonesia with many activities such as education and socialization of corporate governance concept to communities.     

Different with companies under the common law system which is only approved one board of Directors, Indonesia were using two-board system based on Indonesian company law. It is consist of :

1.      The board of Commissioner (Komisaris) that performs supervisory and advisory roles

2.      Boards of Directors (including management) that performs the executives roles.

Someone whose called as “director” in an Indonesian setting might be act as part of executive team, whereas in other jurisdictions they might be part of supervisory or advisory team or part of executive team.      

Also, in Indonesia, they have General meeting of shareholders (FCGI, 2006). This is the most powerful organ in company and has power to approve or disapprove any company regulation.     

Under article 43 of the Lompany Law, it is required to appoint a corporate secretary, and such secretary acts as an investor relations officer.  In addition, it is being proposed that corporate secretary shall also act as compliance officer and keeper of corporate documents such as register of shareholders and special register of the company. One of the members of the “Direksi” may be selected as corporate secretary. Another framework of regulatory after company law, could be found in the rules and regulations issued by Indonesian Capital Market supervisory agency or BAPEPAM. Capital market law were implemented to the public companies i.e company which the shares are held by at least 300 persons and having paid up capital of IDR 3 billion while company law applied to all limited liability companies established under Indonesian law.

As stated in article 95 of capital market law, the company shall disclose any information through its annual reports and financial statement to shareholders as well as its reporting to BAPEPAM, the relevant stock exchanges and the public in a timely, accurate, understandable and objective manner. Companies also should disclose material importance to decision making of institutional investors, shareholders, creditors and other stakeholders with respect to the company.  

Another regulatory that has been issued by BAPEPAM, including:

1. regulation requiring public companies to have independent directors and independent commissioners.
2. regulations that relate with methods of voting shares.
3. comprehensive rules on responsibilities for board of directors and independent auditors with regard to financial reporting and penalties for non-compliance
4. regulations on disclosure of related-party transactions[1]

In earlier, Indonesia has problem in existing standards of auditing and compliance, accountability to shareholders, standards of disclosure and transparency and board processes[2].  According to the survey , Indonesia were rank in one of the worst in perceived standards of disclosure and transparency among Asia-Australia region[3].  Indonesia in the same class with India, china, etc, while the best performers in investor protection are Australia, Singapore and Hongkong.

Anyway, since Indonesia’s economy has been becoming integrate  to world economy for their loans and equity financing, export and import, the docilement of international standard of corporate governance had been obeyed by Indonesian government. One study showed that among others, family control is more common in countries with poor shareholder protection while the widely held company is more common in countries with good shareholder protection.[4] As the same condition with several Asia’s country in ownership structure of the company; family based shareholder is also hold important key in many dominant positions, including in Indonesia.

The result for instance, board of commissioner’s function didn’t work properly in safeguarding the interest of shareholder. Then, check and balances mechanism such as existing of the independent commissioner or committees in company to audit the company process have been lacking. Transparency and another standards which is should be implemented properly are difficult to run adequately as disclosure practices.In term of creditor protection, there are some problem were exist as a result of weak of control and inadequate framework for financial institution, family based shareholder, and inefficient of judiciary system in Indonesia.  Anyway, creditor’s positions and his role in corporate governance sometimes have been weak due to mismanagement as explain above. Family based shareholder make the market only occupied by conglomerates that came from same families.

At previous, there is only little protection for creditors and other stakeholder since in practice it was difficult to declare a company bankruptcy[5]. However, later there is an improvement progress when the old bankruptcy law was replaced with government regulation in 1998 that makes it more reasonable for the court of law to declare company bankruptcy.[6] 

In addition, the high control and concentration of ownership of companies makes the market mechanism can’t work properly for corporate control and product. It is part of family based shareholder result in negative view.In earlier stage, the capital markets in Indonesia were dominated by external finance i.e bank loans, etc. It is because of strict regulatory and ineffective legal procedures that makes role of corporate bonds and corporate financing are limited. Also, the foreign interest rates were more liberalized than domestic rates, make it more comfortable to be chosen.The concept of corporate governance in Indonesia is rarely new in Indonesia. But, the efforts of the government to show good performance in corporate governance increase positive and significantly. Initiatives to set up National Committee for Corporate Governance in Indonesia (NCCG) has been done since agreement between international monetary fund (IMF) and Indonesia government signed in January, 2000. It is part of commitment to applied internationally agreed standards of corporate governance.

NCCG’s main responsibility  are:

1. Codifying corporate governance principles
2. Initiating regulatory reform to support the implementation of the code
3. Developing institutional framework to implement the code.

   An initiative to develop corporate governance practices in Indonesia also includes:

1. developing national strategy for corporate governance reform, including setting up the national committee for corporate governance
2. conducting educational events on corporate governance for the public
3. conducting pilot project to implement corporate governance principles in the industries
4. carrying out regulatory reform within the capital market
5. instituting a fit and proper test for directors and commissioners
6. technical assistance from the international community

 As we explain earlier, the concept is fairly new and need to socialize massively. Every company in Indonesia should implement this with highly enthusiasm to make more value for shareholders, financiers, employees and for company itself. Also, the government should encourage any activity that support for good corporate governance implementation, i.e hold conference, educational service and joint assistance from international community.

Corporate governance has become a major and highly contentious issue in all of the advanced economies in all the developing company.

It happened in Taiwan, too.  It is concerned with the institutions that influence how business corporations allocate resources and returns.  ReBar case problem as one of discover sampling that would be interesting to anyone who lived in Taiwan to know this.  It is an identical sample for all of the family business although there are still many of the successful cases happen in taiwanese society such as Wang’s Taiwan Plastic group.  They are the most successful case in family business in Taiwan.  There are always problem between government, relationship and under table business which means people normally use illegal method to get what they want in their business.  Of course, the business performance, business demand and managing change system are the keys for the business.  Corporate governance in Taiwan has progressed due to improvements in accounting, financial reporting and the courts’ handling of insider trading. According to previous survey by Pricewaterhouse Coopers; Hong Kong and Singapore are the best area in Asia in terms of corporate governance due to its efforts to protect shareholders’ rights.  Although Taiwan made some progress in corporate governance, there is still much room for local companies to improve, including in the protection of shareholders, the publication of employees’ dividends, the independence of governing authorities and the allocation of corporate bonds. Balancing control; liquidity and capital needs are indeed.  If the company become older and larger and included more people in ownership, it will become more critical to strategic planning.

Recently, in Taiwan, corporate governance develops the capital market and financial system. How are Taiwan government going to protect of those shareholders becomes the first important lesson to those business person who want to increase their profit for the company. However, people in Taiwan always deal with relationships in their business; they believed if they can have good relationship with government, government people won’t betray them to announce their “dirty” behavior. However, the term governance is used most frequently by politicians and business leaders (David Wheeler). Actually, who controls it and who check it, is a starting point the premise of corporation will be run most effectively if all stake holders have the appropriate level of empowerment and that executive will manage best provided that they recognize their accountability to all stakeholders.

Finally, Large corporate failures, financial scandals and economic crisis have focused attention on the importance of good corporate governance to many countries. Corporate governance were defined as a set of rules that can create good relationship between internal and external stakeholders in respect to their right and responsibilities in order to create value to stakeholders.

By applying good corporate governance, there are some benefits that could be gained such as more easier to raise capital, lower cost of capital, improved business and economic performance, and also make good impact on share price. The bigger challenge is to ensure they are effectively implemented. Efforts should be directed not only as developing rules and regulation, but also promoting as practices guided by moral responsibility that will eventually paid off by the market.
 

Reference:

Mary A. O’sullivan, 2000, Contests For Corporate Control, Oxford University Press, Oxford Armson, Emma and Sandra Patch, 2000. Current Government Initiatives in Corporate Governance.

A paper presented in ASIC corporate Governance Training Program, Sydney, Australia. Baird,Mark, (April 29,2000). Transparency and corporate governance in Republic Indonesia. The Jakarta Post, p4 

David Wheeler, Maria Sillanpaa, (1997) The Stakeholder corporation a blueprint ofr maxinmizing stakeholder value, Pitman Publishing, London, England 

Forum for Corporate Governance in Indonesia (FCGI), (2000). First Position Paper of the Forum for Corporate Governance in Indonesia. 

Government Regulation That Subtitutes A Law No.1 of 1998 on Changes to the Bankruptcy Law 

John L. Colley, Jr., Jacqueline L doyle, and Robert D. Hardie, (2002) Corporate Strategy, McGraw-Hill, New York 

Keasley, K., Thompson, S., Wright, M. (2005) Corporate Governance: Accountability, Enterprise and International Perspectives. John Wiley & Sons, Ltd. Chichester, U.K. 

Kurniawan M Dudi, Indriantoro Nur. 2000. Corporate Governance in Indonesia. The second Asian Roundtable on Corporate Governance.

La Porta, Lopez-de  Silvanez, Sheilefer and Vishny, 2000. Law and Finance. Journal Of Political Economy, as quoted by Ramsay and Stapledown. Corporate Governance: an Overview of the key issues and Debates.

ASIC Corporate Governance Training Program. Sydney, Australia. Law No.1 Of 1995, Indonesian Company Law  

McDermott, R., Farrel, S., (2004)  Corporate Governance in Canada.  McMillan Binch LLP, Toronto, Canada. 

Pricewaterhouse Coopers in Collaboration with Singapore Exchange. 1999 Survey of Institutional Investors. 

Solomon, J. (2007) Corporate Governance and Accountability 2^nd Ed.John Wiley & Sons, Ltd. Chichester, U.K. 

Staatsblad No.217 of 1905 juncto Staatsblad no.348 of 1906 

Walace, P., Zinkin, J., (2005) Corporate Governance: Mastering Business in Asia. John Wiley & Sons (Asia) Pte Ltd. Singapore, Singapore.

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[1] Outlined in the letter of intent as a commitment to the International Monetary Fund, January 2000

[2] Pricewaterhouse coopers (in collaboration with the Singapore Exchange), 1999 Survey of Institusional Investors

[3] determined by a range of factors:disclosure of information in a timely manner, avoidance of selective disclosure during meeting with major investors, broad market disclosure to transnational investors, disclosure levels are above home country requirements, etc.

[4] La Porta, Lopez-de Silvanez, Shleifer and Vishny, “Law and Finance” (1998) Journal of Politial Economy, as quoted by Ramsay and Stapledon “Corporate Governance: An overview of the key issues and Debates”, Sydney, 2000.

[5] Staatblad No.217 of 1905 juncto Staatblad no. 348 of 1906

[6] Government regulation that substitutes a Law no. 1 of 1998 on changes to Bankruptcy Law

 

Dramatisasi

Biar Dramatisasi jadi Manis

*anis matta

 

Puisi yang terlalu seadanya memang tidak memberi rasa apa-apa. Puisi perlu greget. Perlu hentakan. Perlu dramatisasi.

Begitu juga ungkapan cinta. Cinta hanya bekerja kalau ia membara. Dan baranya meletup-letup lewat kata.  

Qur’an tidak mengingkari itu. Virus penyair yang disebut Qur’an sebenarnya terletak pada kadar kebohongan yang sering menyertai dramatisasi

itu. Begitu juga dengan ungkapan rasa cinta yang terlalu berlebihan sering mengandung kebohongan. Bisa karena tidak berakar di hati. Bisa juga

karena memang tidak mengandung kebenaran. Mungkin juga berakar di hati, tapi tidak mengandung kebenaran. Atau mengandung kebenaran,

tapi tidak berakar di hati. Yang benar tapi tidak ada di hati adalah kebohongan. Yang tidak benar tapi ada di hati adalah kesalahan.

Yang terakhir ini misalnya lagu berikut ini :  Semua yang ada padamuOh membuat diriku tiada berdayaHanyalah untukmuHanyalah bagimuSeluruh hidup dan cintaku 

Ungkapan itu mungkin memang berakar di hati. Tapi mengandung makna pengabdian dan penyerahan diri yang total kepada sang kekasih.

Dan itu tidak boleh terjadi dalam cinta jiwa atau cinta sesama manusia. Itu hanya untuk Allah SWT. 

Di sinilah letak tantangan bagi para pecinta; bagaimana menemukan ungkapan yang benar dan tepat bagi bara cinta yang meletup-letup dalan

jiwa? Yang pertama tentu saja memastikan persoalan dasarnya; apakah memang ada bara dalam jiwa?

Ini jelas sangat mendasar untuk memastikan bahwa “tidak ada dusta diantara kita”. 

Yang kedua adalah menemukan kata yang benar dan tepat. Benar pada maknanya, tapi tepat melukiskan suasana jiwa.

Ini membutuhkan penghayatan jiwa yang dalam, keakraban dengan diri sendiri yang kental, cita rasa keindahan dan kekayaan bahasa. 

Melukis bara cinta dalam jiwa memang membutuhkan kata yang kuat agar baranya nyata dalam pandangan sang kekasih. Tapi kita harus

menakar dengan objektif, seberapa panas bara yang hendak kita lukis. Ini untuk memastikan bahwa kata tidak melampaui panasnya bara,

atau kata tidak melukis semua panas bara secara utuh. 

Akhirnya memang, kejujuran dan kebenaran adalah kata kunci di balik semua dramatisasi cinta yang manis. Hanya itu.

Jika tidak, pasti akan ada kesalahan dalam bahasa cinta kita. Tidak mudah memang, tapi begitulah cinta; selalu punya syaratnya sendiri.

 

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