Should directors discuss human capital too?

  • Business News
  • Saturday, 08 Feb 2014

HR practitioners joining boards may be a result of the war for talent

OUR employees/people are our greatest asset.” If we get a buck each time somebody says that, none of us will need to work any more. That’s how often this line is used (or abused).

Do the bosses really mean it when they say it? It’s hard not to be sceptical when we see endless examples of businesses so focused on the bottom line that employee welfare is nothing more than an incidental cost and an annoying obligation.

And yet, we’re familiar with the idea that employers are caught in a war for talent. These days, we hear complaints all the time that it’s getting harder and harder to hire good people and to hold on to them.

If this is indeed the case, shouldn’t corporations pay more attention to how they manage their human capital? Isn’t a company’s strategies for attracting and retaining talent important enough to be part of the boardroom agenda?

The trouble is, we seldom see this in action. Other than some companies being rated as top employers and, of course, senior executives routinely declaring that their companies’ workforce is the most valuable thing, there’s not a lot of evidence that human capital management in corporate Malaysia has become more sophisticated and central.

Perhaps an announcement through Bursa Malaysia last week is an indication that this is changing.

On Jan 30, Maxis Bhd said Hamidah Naziadin was joining its board as an independent director. She was also made a member of the audit and remuneration committees. What’s striking about this appointment is that it appears that Hamidah was chosen because of her HR experience and expertise.

After all, as head of group corporate resources at CIMB Group Holdings Bhd, she is one of the country’s more prominent HR chiefs. It’s telling that much of the announcement dwelt on her HR-related work and achievements.

It has long been a practice among listed companies to bring in lawyers and accountants as independent directors because they can offer knowledge and insights that can enrich board deliberations. At the same time, these directors can, if necessary, be a counterweight to the legal and accounting input provided by the management.

Other professionals have also been recruited to serve as independent directors because their areas of expertise are relevant to certain industries. These include engineers, IT specialists and doctors.

However, it’s certainly new in Malaysia that a listed company has appointed a HR practitioner from another large company as an independent board member.

The first time may well be in January last year, when the Axiata Group Bhd board welcomed Ann Almeida, HSBC’s group head of human resources and corporate sustainability.

In a press release on Almeida’s appointment, Axiata said the appointment was part of ongoing efforts to strengthen its board while ensuring international and gender diversity at the board level continued.

“Axiata has been strengthening its board by bringing in world-class board members with diverse experience. Her invaluable experience, which extends not only to the Asian region but also globally, will be an important addition to the board, providing us a fresh perspective as we move towards our goal of becoming a regional champion,” said Axiata chairman Tan Sri Azman Mokhtar.

President and group CEO Datuk Seri Jamaludin Ibrahim added: “Talent and HR is a key board and management priority and Ann, with her expansive experience from the banking industry alongside her business acumen and expertise in HR matters, will be an invaluable asset towards this agenda. Together with her notable record of leadership and international background in particular, given Axiata’s regional footprint, will be an important addition to the board.”

Maxis didn’t issue any statements to elaborate on Hamidah’s appointment to the board, but it’s interesting that Maxis and Axiata are both telecommunications companies. Theirs is a talent-driven industry and it’s one of the most active in the job market. Both companies have chief talent officers.

In Axiata’s annual report 2012, Jamaludin wrote: “Talent development in particular, has and will remain a leading focus of the group, as we continue to hire, train and develop highly capable professionals to develop them for leadership roles across Asia. This starts from as early as 13 years of age, with Axiata’s Young Talent programme, where we have pledged RM100mil for the development of students.”

Maxis has this to say in its annual report 2012: “As the industry continues to evolve rapidly, we need to maintain our position by distinguishing ourselves from our competitors, not only in terms of technology and innovation but also in our ability to build and deploy an agile and diverse pool of talent at all levels of the organisation.”

But the telcos can’t be the only businesses that depend so much on talent; it can be argued that they all do.

Hamidah’s company, CIMB Group Holdings, has what it calls Employee Value Propositions, which are essentially its commitments to its employees. One of these is obsession with talent growth.

In the business world, obsession can be quite a scary word, but perhaps it has a place in human capital development. If listed companies begin to genuinely recognise their workforce as a source of competitiveness, we may see more HR practitioners becoming directors.

Executive editor Errol Oh wonders how companies can do better in managing human capital, when they’re not even adept in handling financial capital.

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