Corporate governance more than just following rules, says RHB founder

 Abdul Rashid Hussain says corporate leaders must develop a stronger sense of accountability, particularly in an increasingly complex business environment.

RHB Group founder Abdul Rashid Hussain said compliance with laws and regulations alone is not enough to ensure companies are governed responsibly.

KUALA LUMPUR:

Corporate governance must move beyond a rules-based compliance culture towards one where directors and business leaders take personal responsibility for the consequences of their decisions, RHB Group founder Abdul Rashid Hussain said.

He said compliance with laws and regulations alone was not enough to ensure companies were governed responsibly, particularly when decisions could have far-reaching consequences for shareholders, employees and the wider public.

“Governance is not just about following rules. It is about taking responsibility for the consequences of the decisions that you make,” he said at the inaugural Financial Lines Forum 2026 organised by Chan Ban Eng & Co in collaboration with Universiti Malaya.

Rashid said corporate leaders needed to exercise sound judgment and consider the broader impact of their actions rather than simply asking whether a particular decision was technically permissible.

“The question should not only be whether something is legal, but whether it is right and responsible,” he said.

Rashid said this required directors and senior executives to develop a stronger sense of accountability, particularly in an increasingly complex business environment involving financial, technological and social risks.

Rashid, who is also chairman of Tabung Haji, said the evolution of corporate governance had often been driven by crises, with major corporate failures prompting new rules and safeguards.

However, he cautioned against letting governance become a box-ticking exercise in which directors focused on meeting minimum regulatory requirements without considering the principles behind them.

He said corporate boards also needed to create a culture in which difficult questions could be raised and decisions challenged before problems escalated.

“Ultimately, governance depends on people. Rules can guide behaviour, but they cannot replace judgment, integrity and personal responsibility,” he said.

The forum brought together legal, medical, insurance and corporate leaders to examine liability, governance and emerging risks facing organisations. - FMT