Lack of 'trust' issue for South East Asia economy
Chartered Accountants Worldwide explores factors influencing the South East Asia Economy in the latest of its Critical Success Factors global reports.
The latest report from Chartered Accountants Worldwide suggests that a lack of trust is one of the factors holding back the establishment of a flourishing, integrated economy in South East Asia.
In Critical Success Factors for Tomorrow’s Business Leaders: Perspectives from South East Asia, the international body of chartered accountants argues that businesses need to develop more of a “corporate conscience” by instilling a set of values within their organisations.
The report follows an international summit held in Singapore where senior CEOs, CFOs and executives, together with the heads of global Chartered Accountancy bodies, discussed the challenging new business agenda facing future finance professionals.
The report notes the importance of the ASEAN Economic Community (AEC), created in 2015, which aims to develop an integrated regional economy. It also covers issues ranging from corruption, wide disparities in income distribution and the development of future leaders.
Trust emerged as one of the main factors that needs to be addressed to enable South East Asia achieve its economic goals. The report shows that transparency, corporate governance and recognising the importance of ethics are critical to economic integration and tackling corruption.
Business leaders have to make more of an effort to build trust across the borders and within their organisations (Pat Costello, CAW Chair)
Pat Costello, Chairman of Chartered Accountants Worldwide, said: “South East Asia, despite being cohesive from a geographical point of view, is a very multicultural region with not necessarily consistent approaches to ways of doing business.
"Some staff do not understand the importance of ethics in corporate governance and tend to brush it aside. Unsurprisingly, corruption remains one of the main challenges to achieving the goal of economic integration.
"Establishing the AEC in 2015 was an important step to developing trade across the region. However, business leaders have to make more of an effort to build trust across the borders and within their organisations."
The report identifies accountancy as a “moral science” and notes that chartered accountants should play the role of “ethical guides”. It draws on the close relationship between the profession and accountability.
However, business leaders noted that in South East Asia, this morality is more often reactive than proactive. Accountants have traditionally focussed on preventing things from going wrong instead of building a culture when it becomes natural to do what is right. Changing this approach is critical to building trust across the region and tackling corruption.
Chartered accountants possess the necessary skills to guide transparent and flourishing businesses, contributing to international economic development (Gerard Ee, ISCA President)
The report also examines how nurturing talent and seeking guidance of chartered accountants can help narrow the gaps in economic development and income in ASEAN.
Gerard Ee, President of the Institute of Singapore Chartered Accountants (ISCA), said: “The growth potential in South East Asia is huge. Yet, the benefits may not be spread evenly, which will contribute to the already existing disparities across the region. Training future business leaders is of vital importance here.
"The AEC aims to establish a ‘resilient, inclusive, people-oriented and people-centred’ economic community’, a goal that chartered accountants could help achieve. Chartered accountants possess the necessary skills to guide transparent and flourishing businesses, contributing to international economic development.
"As the report notes, there is an anticipated growth in demand for chartered accountants in South East Asia, thanks to their professional expertise. They are also viewed as key to good corporate governance.”
Find out more about Critical Success Factors: Perspectives from South East Asia. This is the fourth in a series of Critical Success Factor reports which consider the vital issues faced by business leaders in key financial markets worldwide.
It follows a Critical Success Factors summit hosted by Chartered Accountants Worldwide in Singapore in November 2015, bringing together CEOs, CFOs and other business leaders from major national and international organisations across South East Asia.