Significance And Importance Of Training BODs in Co-operatives- A Malaysian Experience Presented by: Mdm Armi Zainudin, Vice President of ANGKASA, and ICA Board Member (Global)

Content of Presentation Background of Malaysian Co-op movement Expectation from government and Social role of co-ops in Malaysia Compulsory Training of BODs and Internal Auditors The Training Programme Issues and Problems Performance and Evaluation

Malaysian Co-operatives ( ) YearNo of Coops Membership (million) Share Capital (RM billion) Assets (RM billion) Turnover (RM Billion ) 20054, , , , ,

ActivityNo.of Coops Members hip Share Capital(RM million Asset (RM million) Turnover (RM million) 1Banking 2838,9322, ,251.54, Credit/Finance 5751,963,0544,170.17,180.11, Agriculture 1,362289, , Housing 10789, Industry/Mfg 11717, Consumer: a. Adult coop 1,681670, , b. School coop 2,1152,106, Construction 11762, Transports , Services ,0841,753.33, Total 7,2156,783,7758, ,99.38,919.0 Malaysian Co-ops by Activities:

Expectations from Government and Social role of co-operatives ……. 1.The National Co-operative Policy (NCP) – First: Now: 2011 – 2020 i) Goals of harnessing co-operatives to increase their contribution towards the nation’s gross domestic product (GDP); ii)to instill the peoples’ confidence towards co- operative movement; iii)to sustain and improve governance; iv)to increase the co-operatives’ economic development activities.

Strategic thrusts of NCP: To stimulate co-operatives involvement in high economic value sectors; To improve the co-operatives capability; To improve the co-operatives human capital; To instill the society’s confidence towards the co-operative movement; To enhance supervisory and enforcement of co- operatives operation by the authorities;

Expectation of Government and social role of co-ops …… 2.RECOGNITION FROM GOVERNMENT that the co-operative sector as the third sector after the government and the private sectors, as the engine of growth to contribute to the nation’s economy…. –The target to be achieved …co-operative sector to contribute 5% of GDP by 2013 and 10% by 2020.

Goals of the training programme: Better and improved co-operative performance Reduce failures for co-operatives Succession for future co-operative leaders Entrepreneurship skills Mindset change / attitudinal change Increase thinking capabilities Increase personal confidence (for women co- operators)

Objectives of the training To improve administrative and management skills of co-operative board members and internal audit members. To enhance understanding and awareness about co-operative principles to co- operative members. To inculcate entrepreneurial skills To understand government policies and expectation regarding co-operatives

Compulsory Training of BODs and Internal Auditors Circular issued by the Registrar of Co-operatives in 2002 All BODs and Internal Auditors within 10 months of being appointed Have to relinquish post if they do not attend the specified course as required BODs -- “Management and Administration of Co-operatives Course” (3days 2 nights) Internal Auditors – “Co-operative Auditing and Accounting Procedures Course” (3 days 2 nights)

Management and Administration of Co- operatives Course Modules: Understanding Co-operative Principles and Co-operative Identity Understanding the Co-operative Financial Statements Co-operative Corporate Governance Co-operative Laws and Regulations Managing and Understanding Co-operative Finance Rights and responsibilities of Co-operative members Co-operative Entrepreneurship

Co-operative Finance and Auditing Course Modules: Understanding Co-operative Principles and Co- operative Identity Co-operative Laws Basic Co-operative Accounting Co-operative Financial Statements Co-operative Internal Control System Auditing Techniques and Mechanics Audit Reporting Techniques Workshop – sample cases

Other Courses for BODs and Internal Auditors: Advance courses in: a)Co-operative finance and auditing management b)Evaluating co-operative performance (FLAME-T) Managing Meetings and minute writing Investment course for co-operatives Short management courses at the Co-operative College of Malaysia

Implementation issues and problems: Wide range of age groups and education levels Language barrier in some areas Absenteeism Enforcement Expenses to be covered by co-operatives Difficulty in identifying candidates for courses Availability of annual funds To maintain proper computerised data base on those BODs and Internal Auditors

Performance Measurement some measures of effectiveness that can be carried out are : test for understanding --using OMR method Increase of women in management position Increase in contribution from co-operatives towards the Development and Education trust funds Failure rates of co-operatives Self assessment of co-operatives (FLAME – T) Improve ethics / corporate governance – less cases referred to the Co-operative Tribunal

Methodologies 1.Short Courses 2.Seminars 3.Workshops 4.On Job Training ( site visits)

No of BODs and Internal Auditors Trained Number Trained By ANGKASA Number Trained By Co-op College Total Trained Balance Co-ops BODs , Co-ops Internal Auditors , ,

Conclusion The Registrar of Co-operatives issued the directive for BODs and Internal Auditors to attend compulsory training in specified courses to improve their management skills, understanding of co-op principles and values and the co-operative laws and regulations; The training have been tasked to ANGKASA and the Co- operative College of Malaysia(CCM) to implement The training modules have been jointly developed by the The Co-operative Societies Commission of Malaysia, ANGKASA, and the CCM To date 72,645 BODs and 24,670 Internal Auditors have been trained

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