The MACC bill and how it affects your company!

A recent article in The Edge Financial Daily dated April 4 announced that the Malaysian Anti-Corruption Commission (MACC) Bill 2018 was amended and now holds organizations liable for corruption. This means that even though the offence were committed by a staff, it could be the CEO, managing director, or anyone from the management team or board of directors that could be jailed and/or fined!

And the penalty is steep, according to the Sun daily, the punishments are (i) A maximum fine of 10 times the sum of gratification involved, or RM1 million, whichever is higher; (ii) A maximum jail term of 20 years; or (iii) Both penalties of the fine and jail term.

With this new amendment, organizations would have to prove that it had already put in place adequate procedures to prevent corrupt practices. The burden of proof is now on the organization and not on MACC. This is definitely one of those situations whereby it is a case of being deemed guilty until proven innocent!

For a managing director or CEO to defend himself successfully, he/she has to prove two elements, namely:

  • The offence was committed without his/her consent; and
  • He/she exercised due diligence to prevent the commission of the offence, taking into account the nature of his function in that capacity and to the circumstances.

It will therefore be critical for directors and management of Malaysian organizations to have systems in place to demonstrate due diligence in preventing such corrupt offences.

The amendment to the MACC Bill 2018 is definitely a step in the right direction. Prevention is better than cure.

An effective method to reduce corruption is to prevent it from happening in the first place and that involves screening out individuals who are a threat to their organizations.

With the amendment, organizations should seriously consider taking proactive steps to ensure they are not just hiring individuals that can perform well, but also have the integrity to safeguard the organization’s interests, especially for those in high-risk and decision-making positions.

This is where Verity Intelligence can assist.

With its vast experience of every employment stage, Verity Intelligence can provide adequate procedures to minimize corruption in organizations of any size.

Verity Intelligence currently serves 700 customers consisting of MNCs of various sizes for which it conducts due diligence for its customers by effectively screening individuals before and during employment.

This way, Verity Intelligence protects organizations from unsavoury activities as the practice of screening is an ongoing process that ensures employees and their integrity are in constant check to minimise corporate liability or risks.

Screening before employment allows organizations to identify individuals based on their track record to determine if they are trustworthy while regular screenings during employment allows organizations to have insights into employees’ current situation while maintaining a meaningful working relationship.

This also ensures that managing directors, CEOs, directors and the management team of organizations do not run afoul of the MACC 2018 bill!

Agree with our suggestion? Perhaps you’d like to see more! We have articles like this and more at verityintel.com.

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