Writing down the ‘unwritten rules’: Professionalisation in Malaysia

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Dato’ Haji Roslan bin Tan Sri Jaffar, Executive Director / Group Chief Operating Officer, AZRB, Conglomorate, Malaysia

The Malaysian conglomerate AZRB is a good example of many of the themes brought out in this year’s survey. The company was founded in 1982 by a strong and visionary entrepreneur, and by 2010 had grown into a company with total assets amounting to $417m, trading in Asia and the Middle East, with interests in construction, infrastructure, plantation, oil & gas, and property development.

The company was, undoubtedly, a huge success, but it has started to face issues that could only be resolved by taking a more professional approach to day-to-day operations, and a more formalised approach to business strategy.

Dato’ Haji Roslan bin Tan Sri Jaffar, the founder’s son-in-law, joined the business in 2010, after training as an accountant with PwC. He has since taken on the role of professionalising the way the family firm operates, drawing on his experience with public companies, and in other sectors. “We had reached the point where we were starting to be held back by our back office – it just wasn’t keeping up. So I spent my first five years here strengthening and streamlining our corporate functions. We also needed to adjust things like the entities we used to bid for specific projects, to make sure the liabilities were held and managed in the right part of the business. We now have a proper headquarters function, with dedicated legal, finance, risk, and strategy teams, and much better systems supporting them. It’s made a huge difference. Though there are still things that a family firm does differently: for example, we don’t do the same degree of risk assessment a public company would when it comes to new ventures. We do look at the risks, but when it comes to making a decision, it’s much more about gut feel and experience.”

Dato’ Haji Roslan bin Tan Sri Jaffar, Executive Director / Group Chief Operating Officer, AZRB, Malaysia

Dato’ Haji Roslan bin Tan Sri Jaffar, Executive Director / Group Chief Operating Officer, AZRB, Malaysia

Reputation is also extremely important: “the company reflects on the founder, and he is very careful about who he employs, even from within the family. When the Malaysian economy hit difficulties a few years ago, many construction companies pulled out midway through the government infrastructure projects because they knew they were going to make a loss. But we didn’t. It was a matter of pride for us to keep our promises and see the contracts through to the end. And we don’t easily provide or recognise potential losses in a project, because the founder believes that doing so will absolve responsibility of the project team to make good or mitigate the losses for the rest of the project.”

Dato’ is now spearheading strategy development for the longer term. “I had to start thinking long term the moment I joined the business.  We’d got where we were by being really flexible and entrepreneurial, but there comes a point when you need rules. We had a lot of unwritten rules, but they can start to get in the way eventually, especially when you bring in new people who can’t be expected to know them all. Professionalisation is an ongoing journey, but I see it as my mission to make us more resilient in the face of any future downturns. To make us stronger for the future.”

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Peter Bartels

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Global Family Business and EMEA Entrepreneurial and Private Business Leader, PwC Germany

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Tel: +65 6236 3818

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