ENHANCING THE ROLE OF BOARD OF DIRECTORS OF AUTONOMOUS UNIVERSITY
AS AGENT OF CHANGE SIRI KEPIMPINAN & GOVERNAN UNIVERSITI MALAYA
UNIVERSITI BERSTATUS AUTONOMI : ISU DAN CABARAN
DATIN PADUKA SITI SA’DIAH SHEIKH BAKIR DIRECTOR & CORPORATE ADVISOR
KPJ HEALTHCARE BERHAD 27 AUGUST 2014
MALAYSIA’S TRANSFORMATIONAL JOURNEY
Government Transformation Programme - introduced by the Prime Minister, YAB Dato'
Sri Najib Tun Razak, in April 2009 - Malaysia to become a high income nation by 2020,
inclusive & sustainable
All sectors should contribute towards this transformation journey… public, private sectors
including universities …need to be more autonomous in managing their affairs
Formed in 1636 by Govt
Now Private Ivy League RU
World’s Largest endowment : @ 2012, $159m in reserve for students, & a $4.093m Pell Grant reserve
A public university; now a collegiate research university Receives some
public money from govt., but entirely self-governing [could choose to become entirely private by rejecting public funds]
Established by Govt in 1845 Transformed into
an independent autonomous university with powers to award and accredit its own degrees and qualifications, via the Universities Act 1997
AUTONOMOUS UNIVERSITIES OF THE WORLD
AUTONOMOUS UNIVERSITIES IN MALAYSIA
GRANTED AUTONOMY STATUS IN YEAR 2012 GRANTED AUTONOMY STATUS IN YEAR 2013
Have the 7 Autonomous Universities in Malaysia fulfilled the definition of Autonomous University?
Institutional governance : Formulate own policies
Finance & wealth generation: Generate income thro’ investments
Talent Management : Recruitment & retention of top talents
Decide on students’ fees & intake
Self-accreditation
Controls & manages its own
corporate governance.
However policies made
are in line
with Ministry of
Education’s objectives
MALAYSIA AUTONOMOUS UNIVERSITIES : CURRENT SCOPE
MALAYSIAN AUTONOMOUS UNIVERSITIES : CHALLENGES FACED BY THE BOARD OF DIRECTORS
Financial : Fully dependent on govt. thus limited freedom in decision-making
Management : must go thro’ the Ministry & various agencies for approval
Academic Freedom : Limited / Bureaucratic & Time consuming
Financial : HOW to manage inflow & outflow to fulfill all needs & obligations?
Management : WHAT is the best leadership / management model to move forward?
Academic Freedom : How to become the PREFERRED university?
NON-AUTONOMOUS UNIVERSITIES AUTONOMOUS UNIVERSITIES
KPJ HEALTHCARE BERHAD TRANSFORMING A STATE GLC ENTITY
INTO AN ENTREPENEURIAL INDUSTRY LEADER
~ SINCE 1981
KPJ HEALTHCARE : MALAYSIA’S LARGEST PROVIDER OF PRIVATE HEALTHCARE SERVICES
MALAYSIA 25 hospitals,
1 university college & 2 branches,
2 aged care centers, …more hospitals in the pipeline
INDONESIA :
2 hospitals THAILAND :
1 hospital
BANGLADESH
1 hospital &
1 nursing school
AUSTRALIA :
1 aged
care center
9/9/2014 9
• Established in 1979 as Sdn. Bhd. & operational in 1981
• Listed on Main Board of the Malaysian bourse since 1994
• MSQH & JCI Accredited hospitals
• >1,000 medical consultants & 10,000 staff
• >2.5 million patients annually
• >RM2 billion revenue annually
• Market cap of >RM3.5 billion (2014)
KPJ’S HIGHLIGHTS
Preferred Healthcare Provider
Deliver Quality Healthcare Services
KPJ’S VMCV
VISION
MISSION
Ensuring
SAFETY Delivering Service With
COURTESY
Performing Duties With
INTEGRITY
Exercising
PROFESSIONALISM
Striving for
CONTINUOUS IMPROVEMENT
CORE VALUES
4th Phase : Transformation (2006-TODAY) - KPJ fully established as industry leader : continuous rapid growth incl. as Bursa’s Top 100 Companies since 2007
3rd Phase : Integration & Consolidation (2002 – 2005) -Streamlined structure, strategic smart partnerships, exporting management expertise
2nd : Strengthening The Business (1994-2001) - Became a PLC, built own hospitals, & acquisition (domestic & abroad)
1st : Devt. Of Hospitals (1980-1993) - Introduction with own built hospital & started acquisition
KPJ’S TRANSITION INTO INDUSTRY LEADER
KPJ underwent a successful growth process in 4 phases in 30 years :
Strong value creation achieved thro’ :
INNOVATION
Continuous
Growth
‘Ordinary’ To
‘Extraordinary’ GOING BEYOND
THE LIMIT
TALENT
MGMT.
CAPACITY
BUILDING
KPJ – PLANNED & OPPORTUNISTIC STRATEGIC JOURNEY
KPJ Created Own Opportunity : build 1st hospital in Johor Bahru in 1979
Optimised New Opportunities : 1st acquisition in Kuala Lumpur in 1988
Expand the Business : acquired hospitals facing stalled growth & took over ailing hospitals
KPJ’s purpose-built hospitals : build new big hospitals / build from abandoned structures
Strengthen KPJ’s Integrated Network : acquisition of profitable hospitals / stand alone
hospitals
Relocation of hospitals
Constant expansion & upgrading of existing hospitals
Foreign ventures in Indonesia, Thailand, Bangladesh & Australia
KPJ Hospitals contribute to Economic Transformation Programme (ETP) : Total Investment of RM814m, GNI of RM1.32b, Create Jobs : >3,000 (incl. doctors)
1. KPJ : STRATEGIC JOURNEY ~ THRO’ CONTINUOUS CAPACITY BUILDING
KPJ Johor KPJ Ampang Puteri
Board of Directors - Well balanced & diversified backgrounds (including medical specialists) - Embrace Transformational Leadership : leaders & followers raise one another to higher levels of motivation & morality - Open communication & continuous co-operation with Management
Unceasing Talent & Intellectual Development -Value creation thro’ in-house training & collaboration with renowned varsities - Creation of own leaders & managers to run the business - Partnership with >1,000 of nation’s best medical specialists (including several Award winners)
Established KPJ Healthcare University College from a Nursing College in 1991 (pioneer, Diploma programmes)
- Trained more than 5,000 nursing & >1,000 allied health professionals - Currently training post graduate specialists in 5 medical specialties (Blue Ocean Strategy)
2 . KPJ : STRATEGIC DIRECTION ~ THRO’ PEOPLE
Embed Culture of Innovation & Creativity
Created own Business model : autonomous & sustainable
Adopted innovative financing scheme – Healthcare REIT
Created own integrated Information System
Implement Quality and Patient Safety Accreditation programmes
Creative branding via publications & electronic media, OOHM,
Health Tourism, Conferences
Develop KPJ intrapreneurs
- unleash internal talents to set up spin-off businesses
- strategically convert Cost Centers into Profit Centres
3. KPJ : STRATEGIC DIRECTION ~ THRO’ INNOVATION
KPJ : KEY MILESTONES
o 2007 : > RM1b turnover @ RM1.11b
o 2008 : > RM100m PBT @ RM114.1m
o 2009 : > RM1b mkt cap @ RM1.37b; #91 on Bursa’s Top 100
o 2010 : > RM2b mkt cap @ RM2.08b; #85 on Bursa’s Top 100;
o 2011 : # 75 (m/cap RM2.74bn) on Top 100; received Healthcare Service Provider of the Year (Frost & Sullivan) Innovative Leadership in Globalisation (Healthcare) (MID) Best Performing Stock : Highest Returns Over 3 years
(Trading/Services) (The Edge 100 Billion Club)
o 2012 : >RM3b mkt cap; met RM2b revenue target
Continuous Awards, Accolades & Recognition
o 2013 : market cap >RM4b ; achieve >RM2b revenue
o 2014 : market cap >RM3.5b (August 2014); continuous awards &
recognition at national & international levels
BOARD OF DIRECTORS
OF MALAYSIA’S UNIVERSITY
- APPLYING INDUSTRY PRACTICES
AT
UNIVERSITY LEADERSHIP
BOARD OF DIRECTORS : APPLYING INDUSTRY PRACTICES AT UNIVERSITY LEADERSHIP
1. Twin Focus on Development & Commercialisation :
Introduce transformation : embark on revolutionary change to balance between :
Development Commercial
High value graduates Students’ Fees
Competitive ‘Services’ (instead of Programs)
Financial Management (2-entry accounting – P&L/Balance Sheet) : for sustainability
Research & Development Talent Management : Hire & Fire
Ranking Evolving Structure & System
Administrative & Educational Governance : relevancy
Branding, Positioning & Marketing of the University’s Strengths
Accountability to stakeholders (govt., Ministry, students, communities)
Accountability to investors / contributors
BOARD OF DIRECTORS : APPLYING INDUSTRY PRACTICES AT UNIVERSITY LEADERSHIP
2. Full Corporatisation of Universities in Malaysia : start now!
Universities aged >40 years & above in Malaysia should be fully autonomous
in phases & ultimately managed like an income-generating business e.g. UM
paved the way (pioneer) towards full autonomy
Consider full autonomy or partnership with industry player
Positive readiness towards autonomous position as Universities have
built strong brand & education excellence
Full fees payment but initially govt. sponsorship for poor & needy
Board to challenge the conventional ‘planned approach’ & adopt
a more ‘opportunistic approach’
9/9/2014 21
Strategy Planned Opportunistic
Structure Elitist Pluralist
Systems Mandatory Discretionary
Staff Individuality Team Spirit
Skills Maximise Meta-mise/New ventures
Style Managerial Transformational
Shared Hard Minds Soft Hearts
Values
21
CORPORATISED UNIVERSITIES : A MODEL OF PARTNERSHIP
Management of universities and businesses can be parallel
e.g. the partnership of Ohio State University & Ford Motors
Corporatised universities are expected to:
(a) raise a much greater proportion of their own revenue
(b) enter into business enterprises
(c) acquire and hold investment portfolios
(d) encourage partnerships with private business firms
(e) compete with other universities (in the market for higher education) to
students who are now regarded as customers William W. Bostock
The Global Corporatisation of Universities: Causes and Consequences University of Tasmania, Australia
BOARD OF DIRECTORS : APPLYING INDUSTRY PRACTICES AT UNIVERSITY LEADERSHIP
3. Asset Re-evaluation for Capital Generation
As a potential business entity, must increase income from self-generated programmes;
lower dependency on grants
Innovative Method ~ Real Estate Investment Trust :
Asset Light Strategy to unlock value of assets for future growth
Increase cash flow
FEES
GRANTS
4. Collaboration & Merger between Universities:
INCREASE effective collaboration between universities or MERGE universities to create larger academic entities with access to greater resources – larger talent pool, bigger funds
Too many duplication of services & programmes/wastage of resources/redundant
Be part of a larger/bigger organization vs. stand alone – reduce risk of being marginalized
BOARD OF DIRECTORS : APPLYING INDUSTRY PRACTICES AT UNIVERSITY LEADERSHIP
5. Embody Transformational Leadership Towards Autonomy:
(a) Board Composition : engaged & balanced
(b) Be a catalyst for change : innovation as a corporate culture with entrepreneurial dynamism
(c) Effective Communication between Board & Management
(d) Remaining committed to mission
(e) Creating a high-level blueprint for change : what the transformed organisation looks like
(f) Accept leadership responsibility / accountability
BOARD OF DIRECTORS : APPLYING INDUSTRY PRACTICES AT UNIVERSITY LEADERSHIP
Overpowering Over-empowering
For autonomous universities to fulfill their potential,
the Board of Directors MUST lead the universities to be financially independent entities…
which will enable the universities to achieve excellence and success in all areas
