In Malaysia, family-owned and government-owned companies are the most frequent ownership models, making up 67.2 % and 13.4 % of the total business community respectively. Additionally, 85 % of Malaysia’s publicly listed companies are run by owner-managers. Because of these companies’ impact on and visibility in the nation’s economy, demands with respect to ethical management and CSR are high. Family companies are particularly expected to maintain a healthy society and environment in Malaysia. Dr. Norhayah Zulkifli and Dr. Dalilawati Zainal, Faculty of Business and Accountancy, University of Malaya, describe three family business CSR strategy approaches and how they have led to success.
The European Commission and the World Business Council for Sustainable Development define companies with CSR as those deciding voluntarily to contribute to a better society and cleaner environment. This broad view of the CSR concept has been recognised by many around the world. As far as family businesses are concerned the prevailing assumption is that when compared to non-family businesses, the business ownership structure is naturally conducive to ethical and socially responsible behaviour due to families being deeply embedded in society and tending to have a vested interest in nurturing long term relationships as a result.
Companies in Malaysia have long implemented various CSR practices ranging from social to environmental activities. These initiatives include a range of benefits, training, and compensation, conformance to ethical and legal expectations, philanthropic and community involvement and social entrepreneurship, in addition to exuding family and/or religious values which take the shape of good deeds. It is clear that family business owners in Malaysia consider good relationships with employees, clients, and suppliers advantageous for their businesses. In this article, we explore the CSR initiatives and practices of AMMB, KLK, and IOICORP, the three top Malaysian family businesses based on their 2009 annual reports. The three cases clearly highlight the varying methods which family businesses apply to their CSR strategies.
Three family business CSR strategies
AMMB is a publicly listed company with majority family ownership which started its operations in 1976 by establishing subsidiaries of commercial and retail banking, capital market, life and general insurance, asset management, trustee/custodian/investment services and investment holding companies, among others.
According to its 2009 annual report, AMMB has structured its CSR strategy into quadrants: marketplace, community, workplace and environment. With respect to marketplace, the company offers a broad range of products and services such as the Family First Solution, which is an all-in-one financial strategy providing a complete set of products and services to fulfill all aspects of a family’s financial requirements. In accordance with Malaysia’s alternative Islamic financial market, AMMB suggests an Islamic stock brokering service for customers requiring Shariah compliance. The group keeps community close at hand in supporting Malaysian youth by developing talent and inspiring excellence in recreational activities through sponsored social clubs. Healthcare also attracts the attention of AMMB’s CSR endeavours as funding is provided to foundations promoting clinical and health services whilst the family business furthermore donates dialysis machines to hospitals. The group additionally contributes a portion of its RM150,000 zakat to the community by giving to a local orphanage.