Honesty & Integrity – Best Policy
Good corporate governance pays off at CapitaLand
Issue: Apr 2010
Dang Ngoc Chau declined gratitude money in a culture where accepting them is common.
30-year-old sales executive, Dang Ngoc Chau, received 10 million VND (US$600) in an envelope when one of the buyers who bought three units of Mulberry Lane, CapitaLand’s first residential development in Hanoi, handed her the signed purchasing contract. It was a gift to thank Chau for her service.
This was the second time Chau’s customer tried to give her cash. It was her way of saying “thank you”.
“I rejected her gesture the first time. I think she felt lucky to have been able to buy three units of CapitaLand’s first project in Hanoi thus she wanted to reward me. It’s cultural in Vietnam to give money when the customers are happy. It is also common for people to receive these gifts,” says Chau.
But to Chau, serving her customer well is her job and receiving such gifts goes against her principle as well as CapitaLand’s corporate governance policy.
“To me, it’s very difficult to be fair once you have received someone’s gift. My job is to make every buyer happy. If I receive their gifts, I will be working for them, not my company,” says Chau.
Chau thus readily declared the 10 million VND gift. Her manager and her decided to convert the cash into advance payment for that customer’s purchases.
Chau’s story, among many, is a testament to CapitaLand’s successful education of its core values of honesty and integrity.
Known to observe and practise good corporate governance with a high level of transparency between the Group and its shareholders, CapitaLand spares no effort to ensure that what it practises at the management and board level cascades to the men on the ground.
“Commitment to the highest standard of honesty and integrity is one of CapitaLand’s core values. Our Group President and CEO, Mr Liew Mun Leong, sets the tone on CapitaLand’s strict policy of zero tolerance on bribery and corruption; and he reiterates the importance of this policy in his management talks, dialogue sessions, staff communication forums and also in his Sunday emails to all staff, both locally and overseas. The respective SBU CEOs follow through with their management talks, dialogue sessions and staff communication forums to shape, build and maintain a culture of honesty and integrity in their business units.” says Ting Tong Koi, Senior Vice President of Operations Compliance Unit at CapitaLand.
Experts say accepting gratitude money is a very common issue in corporate governance. “An important aspect of corporate governance is to ensure this principal-agent problem is reduced or eliminated through processes set in place,” says Director of Centre for Corporate and Investor Responsibility at Sim Kee Boon Institute at Singapore Management University, Professor Jeremy Goh.
But for a multinational company like CapitaLand that has presence in more than 110 cities in over 20 countries, keeping the message consistent and in environments where accepting gratitude money or outright bribery is cultural can be a tricky business.
“There are grey areas. In cultures where giving a red packet as a gesture of thanks, if the person doesn’t accept it, it is seen as rude or giving ‘no face’ to the giver. What do you do then? Well, you can either declare it to the company or accept the red packet but not the money. You then have to explain that this is company policy but you will accept the empty red packet as a gesture of accepting his gratitude,” advises Goh.
Being offered commission by suppliers is a constant affair that Tran Nguyen Minh Phuong stands against.
But good corporate governance should and can transcend cultural considerations. In the mind of 32 year-old Tran Nguyen Minh Phuong there is no doubt what honesty and integrity mean in CapitaLand.
Phuong, who has been working as a marketing manager in the Vietnam office for four years, was presented with a cash gift by an outdoor billboard supplier.
“The guy came into the office and handed me 3 boxes: one for my boss; one for my colleague from the corporate department and the third box was for me. We all opened our boxes because we wanted to share what we thought were chocolates with our other colleagues. The first two boxes were chocolates but inside my box was a stack of cash,” she recounted.
Immediately she informed her boss and submitted the money to the charity committee.
“I deal with many printing houses in my job in marketing and I have been offered commission many times. There was once when I put up a tender for a scale model, one vendor openly offered me a commission over email. That is very dangerous but it is very common to offer commission for procurement. I always tell my vendors not to give me the money but to reduce the cost of printing for the company instead,” Phuong says.
By its very nature, accepting gratitude money or bribery is surreptitious and can very difficult to detect. It is a crime which may be well concealed and known to very few people.
That is why values of honesty and integrity are constantly inculcated in its employees worldwide at CapitaLand.
“Culture of the company is important. And it is a lot of hard work communicating what they should practise down the line to the employees on the ground especially for multinationals with global presence because people from different cultures may not always understand but it’s important to keep emphasising what the company stands for,” says Professor Goh.
Being crystal clear: zero tolerance
Zou Pingnan, Operations Manager in Nanhai Mall, one of CapitaLand’s malls in China, clearly understands the culture of the company he works for. In 2007, he encountered a situation where bribing the officials at the fire department would have helped him to obtain a fire safety permit for the mall faster as he did not fully understand the entire approval process then. But Zou chose not to take that slippery path.
“I know CapitaLand’s culture and zero tolerance for bribery. Instead, I took time to go down to the fire department to study their approval process and communicate openly with the officials there. I must have made so many trips there that I think they were very touched by my work attitude as well as CapitaLand’s integrity in doing business. I managed to get the building’s fire safety permit through the proper process,” recalled Zou.
What is just as important is that CapitaLand’s efforts to imbue the right work values have also paid off in frontline staff like housekeeping room attendant, Landy Huang, in Somerset JieFangBei, Chongqing.
When she found a black wallet in the drawer of the TV cabinet in one of the apartments while she was doing housekeeping, she immediately reported it to her bosses. There was more than RMB2,000 along with other personal documents in it.
The wallet and all its contents were subsequently returned to the grateful guest.
Public area cleaning staff, Shen Feng, was praised for her honesty and integrity.
Another lost and found incident that occurred also at Somerset ZhongGuanCun involved public area cleaning staff, Shen Feng, who found a clutch bag that was left behind by a parent who had come to pick up his child after a tuition class that was held at a meeting room there.
Shen, without hesitation, gave the clutch bag, which contained more than cash RMB2,000, to the security department.
“When the parent came back later that day to look for the bag, he was very happy and thankful to find his bag and all contents intact. He decided to bring this matter to the attention of the management and to compliment the staff,” says Benjamin Tan, Residence Manager, Somerset ZhongGuanCun.
CapitaLand certainly views honesty and integrity as good business practice.
“Maintaining honesty and integrity in the conduct of our businesses is important as it contributes towards our branding and our good reputation. We are glad to note that so many of our colleagues have displayed these values of honesty and integrity in the course of their works. Well done!” encourages Ting.
Professor Goh agrees and says that ultimately, corporate governance principles go back to protecting the shareholders.
“It’s a manager-owner relationship. If the manager, say a sales person accepts a bribe, he might do something to benefit the person who bribed him but it may not necessarily be beneficial to the shareholders. So what the men on the ground do, does affect the shareholders.”
In this regard, CapitaLand’s efforts have paved the way in the right direction.