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COMPANY SECRATARY ETHICAL DILEMMA (CONFLICT & FRAUD)

The document discusses the ethical dilemmas faced by corporate secretaries, particularly regarding conflicts of interest and the prevention of fraud and corruption. ASCEND emphasizes the importance of transparency, ethical behavior, and robust communication to uphold corporate governance and integrity. The corporate secretary plays a crucial role in educating management, implementing internal controls, and fostering a culture of integrity to mitigate risks associated with unethical practices.

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Rabiatul adawiyah
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25 views

COMPANY SECRATARY ETHICAL DILEMMA (CONFLICT & FRAUD)

The document discusses the ethical dilemmas faced by corporate secretaries, particularly regarding conflicts of interest and the prevention of fraud and corruption. ASCEND emphasizes the importance of transparency, ethical behavior, and robust communication to uphold corporate governance and integrity. The corporate secretary plays a crucial role in educating management, implementing internal controls, and fostering a culture of integrity to mitigate risks associated with unethical practices.

Uploaded by

Rabiatul adawiyah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Task 1: The Ethical Dilemma

Conflict of Interest

Conflicts of interest arise when corporate secretaries for personal or financial interests
intrude on their professional duties, resulting in the possibility of irregularities in the
decision-making process or actions. In this company, ASCEND teach their corporate
secretary to be responsible for ensuring the smooth operation of the corporation by upholding
standards of transparency, ethical behaviour and robust communication among the board of
directors, directors and shareholders. However, there may be conflict of interest in those
situations where the responsibilities of a corporate secretary come into conflict with the
decisions of the senior management, thus impacting the overall governance of an
organization.

To protect their independence and reduce the possibility of a conflict of interest. After
the company has been incorporated, our corporate secretary will liaise with the client to make
them know about update on the latest laws and regulations, including from the SSM or Bank
Negara. During this consultation, the corporate secretary ensures that the client is well
informed about potential conflicts of interest that may arise between shareholders, directors,
and management, apart from the relevant guidelines and regulatory frameworks to be
followed. This anticipation strategy helps in establishing accurate expectations from the
beginning.

ASCEND prioritises the execution of resolutions within a firm in a transparent and


inclusive manner. The corporate secretary guarantees that every director endorses a
significant action or resolution. In the event of a conflict, the secretary may express concerns
over the procedure, ensuring that all directors are informed and consent to the conclusion.
The corporate secretary may also directly engage with the directors to address any conflicts
or difficulties with the settlement, ensuring that the decision-making process stays
autonomous and adheres to legal stipulations.

Moreover, ASCEND adheres to stringent protocols for managing conflicts of interest.


The corporate secretary also plays a crucial role in conflict situations, such as disagreements
between the top management and the board of directors, to ensure that such issues are
identified and dealt with according to laid-down regulations. They must notify the parties
concerned and take certain actions to reduce the risks. If a resolution is not possible, the
corporate secretary can advise the firm to take up a new secretary or quit the responsibilities
to maintain integrity and independence.

The challenges of independence are intensified by the growing demands and


obligations imposed on corporate secretaries. The MACC Act and the Companies Act
establish explicit directives about corporate governance and ethical behaviour. With the
increasing stringency of legislation, corporate secretaries frequently face pressure to fulfil
their obligations within established parameters. Should the corporate secretary's
independence be compromised in any ethical challenge, it may result in diminished
credibility, potential legal ramifications, and harm to the company's brand.

In conclusion, conflicts of interest pose a significant barrier to corporate governance,


requiring corporate secretaries to maintain vigilance and independence to preserve the
organization's integrity. By complying with stringent regulatory standards, promoting
transparent communication with directors and shareholders, and resolving conflicts candidly,
ASCEND guarantees that corporate secretaries uphold ethical standards and avoid
compromising their obligations.
Task 1: The Ethical Dilemma

Fraud and Corruption

Fraud and corruption are serious ethical issues that can damage a company's
reputation, finances and operations. ASCEND has implemented a few measures to prevent,
detect and deal with fraud and corruption in the companies they regulate. These measures
ensure that the corporate secretary contributes to maintaining transparency and accountability
in all company operations, helping to prevent unethical practices and possible violations of
the law.

The corporate secretary's primary role in combating fraud and corruption is to educate
the board of directors and senior management. ASCEND emphasizes the importance of
developing and maintaining strict internal controls, procedures and inspections to ensure
employees are not involved in fraudulent activities. This involves providing clear Standard
Operating Procedures (SOPs) for processes such as vendor selection, contract approval and
financial transactions, making it difficult for fraudulent behaviour to occur without detection.

A key aspect of ASCEND's approach is ensuring that all contracts and vendor
relationships are scrutinized. The corporate secretary plays an important role in advising the
board on how to implement policies that prevent conflicts of interest. For example, they
recommend reviewing prices and contract terms to ensure fairness and transparency. They
also ensure the early detection of any potential fraud or corruption by setting up effective
systems for checking any discrepancies or suspicious activity. It would prevent or minimize a
number of risks before they might be blown out of proportion.

Moreover, ASC. They also facilitate the engagement of independent auditors who can
assess whether the company's accounting practices meet legal standards and best practices in
the industry. The auditors also carry out routine checks that may reveal any anomalies that
could suggest fraud. The corporate secretary contributes by ensuring that these audits are
carried out regularly and any findings are reported to the board for immediate action.

In addition to preventive measures, ASCEND places a strong emphasis on dealing


with any incidents of fraud or corruption as soon as they are detected. The corporate secretary
is responsible for promptly informing the board of any suspicious activity and advising them
of appropriate action. This may involve an internal investigation or involve law enforcement
if the situation warrants it. ASCEND also recommends that companies establish internal audit
teams, especially in sensitive industries such as finance, where the risk of fraud and
corruption is higher.

Corporate secretaries cultivate a culture of integrity within the firm by promoting


ethical behaviour and encouraging employees to report any issues. ASCEND recommends
that firms establish a whistleblower policy to protect employees who report fraud or
corruption from retaliation. The corporate secretary promotes transparent communication to
guarantee that all stakeholders comprehend their obligations in preventing and confronting
unethical actions.

In conclusion, ASCEND is vital for aiding companies in the prevention, detection,


and management of fraud and corruption. The corporate secretary is vital for upholding the
integrity and transparency of the corporation by advising the board of directors, enforcing
rigorous rules, performing frequent audits, and fostering ethical behaviour. These measures
are crucial for maintaining public confidence and safeguarding the company against financial
and reputational damage.

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