BBBD3063 Corporate Administration: Tutorial 1 – Roles & Functions

QUESTION 1 (Q1 – June 2017)

MCC Bhd (MCC) was a fast growing medium-sized food manufacturing company, has
approximately 200 factory workers in its three different manufacturing plants. A large
proportion of its workers are foreigners from Indonesia, Bangladesh and Pakistan. MCC is
quite well-known among the local and foreign factory workers as a relatively good
employer that takes good care of its employee’s welfare. It provides benefits such as
clothes allowance, festive allowance, children school fee allowance, free shuttle bus to the
workplace as well as school bus service for the employees’ children. However, MCC is
also well-known for its strict and adamant human resource policies on employee poor
performance, absenteeism and misconduct.
Mr Robert Loo has been the company secretary of MCC since its inception 15 years ago.
His main duties include corporate compliance and stock exchange requirements. As a
panel member of the Disciplinary Inquiry Board, he also found his involvement in matters
related to industrial relations disputes to be of greatest challenge.
Recently, disciplinary actions were taken against few workers at MCC and this prompted
the workforce to call for a strike. The workers on strike comprised largely of local workers
with only 10% foreigners. The local workers were of the opinion that MCC was trying to get
rid of them to hire more low-wage foreigners and it was using poor performance and
misconducts as excuse against them. The strike affected the operations and caused
massive delay in production.
Mr Robert Loo said that the issue of dispute was not made clear and it was a wildcat strike
as the workers did not follow the prescribed procedures for holding a strike. Furthermore,
the workers were not represented by any trade union. Mr Robert Loo warned the workers
to stop the strike or face the negative consequences of the illegal strike.
The workers stopped the strike immediately when he proposed to have a conversation with
an employee representative to settle the issue. Upon investigation it was found that the
workers’ anger was caused mainly by three recent cases where employees were dismissed
by the company.
Case One
At the recent performance appraisal exercise, nine workers were rated with poor
performance where seven were local workers and two were foreigners. The seven local
workers were dismissed upon receiving an oral warning followed by two written warnings
over a period of six months. The other two foreign workers were not dismissed because
they showed improvements in their work and are constantly being monitored.

Case Two
Three local workers who failed to report to work three days in a row without notification
were given a written warning on their first offence and they were subsequently terminated
with immediate effect when similar misconduct was repeated.

Case Three
This was a theft case where it involved a group of four local workers who were caught
stealing finished goods from the factory and selling them at lower price to other small
BBBD3063 Corporate Administration: Tutorial 1 – Roles & Functions

businesses. All four workers admitted their misconduct when evidences on the CCTV
footage were presented to them. These workers were terminated with immediate effect.
MCC had no domestic enquiry procedures in place and all the employees mentioned above
were dismissed without any domestic enquiry. The Board of Directors requested Mr Robert
Loo to work jointly with the Human Resource Manager to draw out clear policies and
procedures to deal with workers’ disciplinary issues, especially the procedure for
domestic inquiry.

(d) Discuss the role and function of a company secretary/administrator. Should Mr. Robert
Loo be involved in Human Resource Management and worker’s dispute matters in MCC?
(10 marks)
SUGGESTED ANSWER:
• The ICSA has adopted two classifications, i.e. “core” and “additional” duties.
i. The “core duties” are legal obligations (specified by various Acts such as the Malaysian
Companies Act 1965) and consequent offences (ICSA, 1988, p. 12 and Appendix A) and
those which result from best practice (ICSA, 1988, p.7).

ii. “Additional duties” are those other than the core duties and tend to take substantial amount
of chartered secretaries’ time. The additional duties undertaken depend on the personal
capabilities, previous work experience, and academic background of the secretary concerned.

Mr. Robert Loo can be involved in both the core and additional roles/functions at MCC. In MCC,
Mr. Robert Loo is required to be involved in the additional Human Resource and employee
disciplinary roles as the company requires his expertise and advice in the matters.
i. His core duties were discharged in his dealings with the compliance of corporate law and
stock exchange requirements such as organise and run board meetings and general
meetings, draw memorandum and articles or dealings with statutory registers, statutory
returns, reports and accounts as well as corporate governance.

ii. Mr Robert Loo’s additional duties at MCC included human resource matters and workers’
dispute matters as mentioned in the case. It may also include other additional duties such as
risk management or health and safety compliance based on the nature of business of MCC
or as assigned by the top management/board of directors. He may also be dealing with special
assignment by the board of directors such as the drafting of the disciplinary and termination
procedures or the domestic inquiry procedure as mentioned at the end of the case.

QUESTION 2 (Q1 – Dec 2016)

FastDeliver is a local carrier company established in 1990. With more than 20 years’ of
experience in providing domestic and international carrier services, FastDeliver has more
than 100 stations at strategic locations in Malaysia. FastDeliver provides next day delivery
for its courier services; logistics and warehousing; international freight (both air and sea);
pick and pack, and special projects for customers. FastDeliver, as stated in their official
BBBD3063 Corporate Administration: Tutorial 1 – Roles & Functions

website, promises to provide affordable, fast, accurate and reliable services to all valued
customers.
Currently, there are three divisions in FastDeliver, which are Express Division, Supply
Chain Division, and Freight Division. The divisions are managed by three managers who
are based in the headquarters of the company. They are assisted by station supervisors
in dealing with the daily operations of the stations at different locations.
With the rapid growth in e-commerce in the nation, the demand for international and local
courier services has increased tremendously. To deal with the increased orders of
customers, the three managers focus on the daily operations of the stations to make sure
fast, accurate and reliable services are provided to all customers. Overseeing the
operations of more than 100 stations has taken up most of the managers’ time, and
therefore they are not able to oversee the support services of the business, including
human resource management and information technology (IT) management, which are
equally crucial in ensuring smooth operations in the company.
There are few issues in the company alerting the managers that more attention needs to
be put on the support services of the company. One of the issues is the high turnover rate
of new employees. Many of the newly hired employees quit their jobs after few months
joining the company. Some of them do not meet the required qualification while others do
not possess the relevant working experience. The company suffers a high cost in getting
replacement due to high turnover rate of the newly hired employees. Also, the station
supervisors complained that the high turnover rate has caused disruptions to the normal
business operations in the stations. The time spent in training new employees and the time
taken by the new employees to learn how to perform a task has delayed the total operations
time in the stations.
FastDeliver is planning to upgrade its information system to cope with the increased
demands for its services. One of the plans of FastDeliver is to develop an online portal to
perform some operational tasks which currently performed by employees manually, such
as processing documents. The purpose of having online portal is to ensure better, faster
and more accurate services to be provided to the customers. With the development of the
online portal, it is expected that FastDeliver would need more IT staff in overseeing and
maintaining the online portal. However, the current information technology staff of
FastDelivery has no expertise and also capacity in handling the development of such
system.
On the other hand, the managers are concerned on an issue related to a truck driver of the
company. Previously, the truck drivers of FastDeliver were classified as permanent
employees. However, FastDeliver has reclassified the truck drivers as independent
contractors in January 2016. By such reclassification, FastDeliver is able to avoid paying
truck drivers overtime, providing them leave and medical benefits, or contributing to
mandatory contributions. Not long after the reclassification, one of the truck drivers,
Muthu, was involved in an accident and suffered from leg injuries while delivering courier
packages to FastDeliver’s clients. Muthu has injured his legs in the accident. He would like
to claim from Social Security Organisation (SOCSO, also known as PERKESO) for his
injuries. However, Muthu was informed by SOCSO that FastDeliver had stopped
contributing to SOCSO for its truck drivers since January 2016. Therefore, Muthu would
BBBD3063 Corporate Administration: Tutorial 1 – Roles & Functions

not get any compensation from SOCSO due to the non-contribution. Muthu was very
dissatisfied with the decision and claimed that he would lodge a complaint at the labour
office against FastDeliver on the non-contribution to SOCSO. According to Muthu, he is
still a permanent employee of FastDeliver. This is because FastDeliver is still managing
Muthu’s daily schedule after the reclassification. Muthu still needs to follow the working
hours of the stations, and also to apply leave from the station supervisors if he would like
to take a day off. Muthu’s name is still found in the organisation chart of FastDeliver, and
he is given a workstation in the station that he is attached to. Also, he receives monthly
salary from FastDeliver for his rendered services.
Another issue that the managers need to handle is related to customer’s complaint. Due
to the above mentioned accident, Muthu failed to deliver the courier packages to the
customers on time. Some of the packages had also been damaged in the accident. The
affected customers would like to claim from FastDeliver for losses they suffered due to the
non-receipt of packages or delays in delivery. However, FastDeilver claimed that Muthu is
the independent contractor of the company, and therefore FastDeliver would not
compensate to the customers as the accident was caused by Muthu. The affected
customers were very dissatisfied with FastDeliver’s reply, and said that they would lodge
their complaints to consumer tribunal to get compensation from FastDeliver.
Apart from the above issues, the three managers have also received complaints from the
employees saying that the payroll statements that they received since January 2016 did
not show the amount of contributions to Employees Provident Fund (EPF, also known as
KWSP). When the managers checked with the person-in-charge, it was found that the
payroll software of the company has already expired. The person-in-charge has to prepare
the payroll manually until the budget for purchasing the new payroll software is approved.
The managers also found out that the person-in-charge did not inform the relevant
authority on the cessation of EPF contributions for the truck drivers as a result of the
reclassification.
The managers are proposing to reorganise the organisational structure of FastDeliver, so
that a new department called “Corporate Administration Department” be established to
manage the support services of FastDeliver, mainly human resource management,
information technology management, and legal compliance. However, the Managing
Director of FastDeliver has counter proposed to outsource such services.
REQUIRED:
(a) Using Michael Porter’s value chain model, discuss how the establishment of the
“Corporate Administration Department” would benefit FastDeliver. (10 marks)
SUGGESTED ANSWER:
According to the value chain proposed by Michal Porter (1980), organisational activities can be
divided into two categories: primary and support. In Fast Delivery, Express Division, Supply Chain
Division, and Freight Division are running the primary activities of the business, and the new
department, namely the Corporate
BBBD3063 Corporate Administration: Tutorial 1 – Roles & Functions

Administration Department would provide support function in the value chain in overseeing human
resource management, information technology and legal compliance in FastDeliver.
The interaction of the three divisions (primary function) and the Corporate Administration
Department (support function) would help FastDeliver in achieving the margin of competitive
advantage. For instance, getting and retaining the right personnel (under human resource
management) will contribute towards the provision of fast, accurate and reliable services to all
valued customers.
Effective corporate administration is crucial for enhancing performance of FastDeliver by ensuring
that the aims of organisations are achieved. For instance, a better human resource management
would have reduced the high turnover rate of the company by having a proper human resource
strategy. Also, by setting up the department, there would be the right personnel to look after the
online portal and also the legal issues of the company.
Failure in administration will impact on the effectiveness of the whole business. Therefore, there
can be little doubt that corporate administration is an absolutely essential strategic support to the
primary activities of FastDeliver.
(b) Evaluate the proposal of the Managing Director to outsource the support services of
FastDeliver. (6 marks)
SUGGESTED ANSWER:
The managers can consider outsourcing of the relevant functions to external professional service
provider(s). The service provider, who normally is a specialist in the provision of the services,
allows FastDeliver to concentrate on its core business. Outsourcing is an appropriate alternative
because the activities concerned, including recruitment and selection and development of online
portal, are necessary activities, but are not core to the development and success of the business
of FastDeliver overall. With outsourcing of such activities, the managers would be free from the
direct management of such activities, and therefore reducing the overall administrative burden of
FastDeliver.
Also, compared with setting up a new department, the outsourcing cost is more predictable and
within the control of the management of FastDeliver.

QUESTION 3 (Q4 – Dec 2014)

Terrence involves actively in the administration of his company. He plays the role of advisor to
the chief executive officer (CEO) of the company on administrative matters. His major function is
to ensure smooth running of the operations of the company. Occasionally he is tasked with special
project such as office renovation, purchasing insurance, etc. Sometimes Terrence is confused
about his job scope but he is advised that what he does are actually the roles and functions of a
corporate administrator.
Recently, the human resource manager of the company complained that he was dissatisfied with
Terrence’s interference in the running of his department. The human resource manager claimed
that Terrence has no authorities in his department and therefore he should not interfere in the
departmental activities. The dissatisfaction arouse from an incident where Terrence advised the
human resource manager to look into a case relating to an employee from production department.
BBBD3063 Corporate Administration: Tutorial 1 – Roles & Functions

The employee claimed that he was threatened with dismissal by his departmental manager as he
intended to form a trade union in the company. Terrence advised the human resource manager
to investigate further and to take necessary action. The human resource manager pinpointed that
there was a clause in the staff handbook saying no one in the company should form or join any
trade unions. Terrence advised that the company has no right to prohibit any employees from
joining or forming trade unions. Terrence insisted that the clause should be removed from the
staff handbook.
The facilities manager was not happy with Terrence’s involvement in the department too.
Terrence was tasked by the CEO to look into the issue of major breakdowns of important facilities
including lift service and telecommunication system of the company. To carry out this task,
Terrence sought cooperation from the facilities management department. However, the facilities
manager was not very supportive by just sending few operational staff to work with Terrence.
REQUIRED:
(a) Explain Terrence’s authorities in the company by clarifying his roles and duties as a
corporate administrator. (10 marks)

SUGGESTED ANSWER:
• The role and functions of the corporate administrator are a mixture of legal, quasi- legal, and
managerial.
• His quasi-legal obligation arises in his capacity as corporate adviser and assistant to the Board
of Directors.
• Therefore, Terrence is the corporate advisor and assistant to the board of directors when he
holds the position of corporate administrator.
• He has the authority to give advice with regards to the matters of the human resource and
facilities departments.
• His main function is to ensure smooth running of the organisations by providing relevant advice
to the organizational members.
• As a corporate administrator, Terrence has to carry out his duties for the corporation within the
legal framework and acts prudently (with good judgment).
• Therefore he has the right to advise the human resource department in removing the clause in
the staff handbook if he found that the clause is against laws.
• As a corporate administrator, Terrence holds managerial role when he is entrusted to look into
specific issues, or undertake specific assignments.
• When he is assigned with specific assignments, he has the authority over those working in the
assignment.
• Therefore, the facilities manager should give Terrence his full support in ensuring smooth
completion of the tasks assigned to Terrence.