Question
Tekoma Berhad is a listed company which produces and sells fresh milk in Malaysia. It adopted Malaysias corporate governance model as outlined in the Malaysian
Tekoma Berhad is a listed company which produces and sells fresh milk in Malaysia. It adopted Malaysias corporate governance model as outlined in the Malaysian Code on Corporate Governance (MCCG) 2021, where Malaysia's model of corporate governance is based on the Anglo-Saxon model. The model required the company to setup a single board (or known as a unitary board) structure. The unitary board is made up of a mix of executive and non-executive directors. There is no hierarchy of board, all directors have the same status, accountability and right to participate in boards decision making. They also have legal responsibility toward management of the company and strategic performance. On the other hand, some other countries operate dual board structure (for example, Germany, which has a management board and a supervisory board) or even a three-board structure (for example, Korea and Japan which operates using business networking model). Recently, Tekoma Berhad received criticism in the national press and social media in Malaysia concerning its weak whistleblowing practices and lots of its customers were hospitalized after purchasing and consuming some of its fresh milk which was contaminated. This resulted in low demand and support in its products and a huge fine by the Government. The board of the Tekoma Berhad believes in improving the relationships with stakeholder groups such as suppliers, customers and employees in order to regain its reputation, as well as trust and confidence from the stakeholders. Tekoma Berhad has come out with the following corporate social responsibility (CSR) stance in order to correct the shortfall in sales: paying all bills of hospitalized customers and reducing the prices of its products for customers. sourcing high quality raw materials from suppliers and providing suppliers with capital to produce more. using efficient processes and motivating staff to encourage them to give their best. maintaining the highest standard of hygiene and complying with the standards issued by the Ministry of Agriculture and Food Industries (MAFI). REQUIRED:
(a) Compare and contrast FOUR (4) features of Tekoma Berhads Board structure with the structure that can be found in Germany. (12 Marks)
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