PROFILE OF OUR FOUNDER CUM GROUP CEO

 

 

 

MR. JAMES OH had served as Financial Controller of publicly listed companies, both locally and in Singapore. He has broad exposure and experience in Finance, Treasury, Accounting, Secretarial, Legal and Corporate Finance. He had worked with numerous companies such as IJM Bhd., Hong Leong Group Bhd., Transmile Group Bhd. and Scorpio East Holdings Ltd.

He is an avid reader of the Bible, Management, Economics, History, Finance, Law and Political books and he brings a unique perspective and style to his writings and talks. He has the remarkable ability to capture and hold audience attention with combination of stories, examples, humor and concrete, practical ideas that deliver results. He intends to become one of the leading authorities on the development of human potential and personal effectiveness. He is an energised person with a wonderful ability to inspire readers of his blogs toward peak performance and high levels of achievement.

 

He is currently working in various capacities such as Freelance Accountant, Technoprenuer, Socialprenuer, Environmentalist, Trainer and Articles Writer.  

He obtained a Bachelor of Laws (Hons.) degree from the University of London in 2003 and a Bachelor of Accounting (Hons.) degree from the National University of
Malaysia in 1987. He became a registered professional Accountant in 1991 and he was accepted as a Full Member of Singapore Institute of Directors in 2008.

James Oh

KEY PERFORMANCE INDICATORS

Dear everyone,

Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), is used significantly to present or identify a few factors that organisations should focus on to be successful. This is because they serve as a powerful and meaningful tool to define and measure the progress of their pre-set goals. As such, the key impetus for using KPI was the notion that factors which get measured are more likely to be achieved versus factors which are not measured. Hence, I decided to bring it into our today's discussion, with the hope that you too equip yourself with this tool.

A) Definition

i) What Does Key Performance Indicators (KPI )Mean?

A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their strategic and operational goals. KPIs vary between companies and industries, depending on their priorities or performance criteria.

ii) Investopedia explains Key Performance Indicators

A company must establish its Strategic and Operational goals and then choose the KPIs which best reflect those goals.

For example, if a software company's goal is to be the fastest growing company in its industry, its main performance indicator may be the measure of annual revenue growth. You may find some KPIs in some annual reports. Also, KPIs are often refer to as the Industrial Standards, in that particular sector.

As usual, once an organization has formed its mission, identified all its stakeholders, and defined its goals, a useful tool to measure its progress toward those goals is required. And Key Performance Indicators come in to the picture, to play the role like  measuring tapes.

B) Characteristics

The Key Performance Indicators selected must best reflect the organization's goals, they must be key to its success, and they must be quantifiable (measurable). Key Performance Indicators usually are long-term considerations.

I will discuss these three main issues in more depth:-

a) Key Performance Indicators must be in quantifiable measurements.

An organisation may have chosen the percentage of its income that comes from return customers as KPI. A school may focus its Key Performance Indicators on graduation rates of its students.

b) Reflect The Organizational Goals

A company has one of its goals "to be the most profitable company in our industry" will have Key Performance Indicators such as "Pre-tax Profit" and "Shareholder Equity" that measure its profit.

On the other hand, a school which is not concerned of making profit, will chose different Key Performance Indicators. KPIs like "Graduation Rate" and "Success In Finding Employment After Graduation", precisely reflect the school's mission and goal.

c) Must Be Quantifiable and Measurable

In order for it to function, Key Performance Indicator must be translated into meaningful ratios or percentage or value, which accurately define its goal, that can be quantifiable and measurable. To make this point clearer, just take an example of a KPI such as "Be The Most Popular Company". You can see it is not clear and very subjective because there is no way to measure the company's popularity or compare it to others.

Another good example we can look at, is a general goal such as "Generate More Repeated Customers", is meaningless because it does not distinguish between new and repeat customers.

Once the Key Performance Indicators is defined, it is good to use them constantly throughout the years so that you can measure them over a longer period. To make it more meaningful, you may consider whether to breakdown into KPI components. For example a KPI of "Increase Sales", you need to consider whether to break down into units sold or dollar value of sales.

Further considerations, as append below, may need to be considered on Good Returns or discount

 i) whether it needs to be deducted from sales in the month of the sales or the month of the returns?

 ii) whether sales needs to be recorded at list price or at the actual sales price?

It is also a good practice to use your pre- set targets, as your benchmark, for each Key Performance Indicator.

d) Must be Key To Organizational Success

KPIs must be selected from those Critical Factors that are essential to the organization reaching its goals. It may be good to keep the number of KPIs small so as to keep everyone's attention focused on achieving the same KPIs. KPIs should not be easily achievable, 

It must be stressed that what is important here is that the KPIs must help the company to meet its overall objective.

Trust the above discussion has given you a good understanding of its concept and application.

Please feel free to share your view/ thought in this issue. Thanks and look forward to hearing from you.

Skype me at james.oh18

James Oh

HOW INVESTOR RELATIONS CAN ADD VALUE TO INVESTORS AND MANAGEMENT

HOW INVESTOR RELATIONS CAN ADD VALUE TO INVESTORS AND MANAGEMENT

With my preceding article on the importance of investor Relations (IR), I have touched on the IR roles, function and benefits. The nature of its work is more inclined to communicate with media as well as for financial analysis.

There are  many changes which, have taken place everywhere and the capital market is in no exception at all. This may be viewed as a great wonderful opportunity as it can add value to both management and investors.

Today, I am going to touch on some of the effective strategic initiatives which may be embarked by this unit, which I have laid down, in bullets point, for easy reference and understanding as appended below:-

a) Need to educate and inform investors regularly about the industry trends, material and significant things they should know and be aware of the business environment in which the company's operates. Understand how your industry is viewed. In this connection, you also need to select and analyse a peer group. 

b) Sets strategy to monitor what drives value in your stock and how your company fares on those matrix. 

c) Determines and assess how future initiatives affect long term shareholder value.

e) Targets investors effectively. In this sense, you need to know who is really going to influence the value of your company's stock as lead steers.

f) Monitors what drives value from the investors' perspective and constantly provide investors' insights and their decision making criteria to management and the board of Directors. In this context, you may gather insights from a representative samples of investors, gathering information among a few of the loudest and frequently heard investors that can caused the company to go down to the wrong path.

g) Needs to become part of the company's strategic planning team, which lead the future of your company. As such, you need to sit at the table with the key management teams to discuss and draw out the strategies of how you are going to communicate internally and externally. These alliances are crucial so as to ensure that everyone is speaking with one voice.

As such, trust you can see clearly how important that this unit  stay proactive and interactive with investment communities so as to give them a sense of comfort, besides arming with the necessary skills and knowledge  which may be market sensitive information. To build for the  long haul and in a transparent manner, all information released need to be consistent with its story line so as to earn a high integrity for the company. It is critically importance to earn the investors' confidence. Bear in mind, the company cannot avoid competing for investors both locally and internationally.

As the whole country, cannot avoid competing for international investors with other countries, so if you don't play this segment well, Malaysian companies will lose out.

That's all and seeing you again for another useful article on IR.

James Oh

Skype me at james.oh18

THE IMPORTANCE OF INVESTORS RELATIONS

THE IMPORTANCE OF INVESTORS RELATIONS AND ITS BENEFITS

Hi readers,

THE revised Malaysian Code on Corporate Governance which incorporated the fifth responsibility of a board - “developing and implementing an investor communications policy for the company” - should be viewed positively by all parties as a whole. This initiative has been taken by the authority to address this critical issue seriously.

With this in mind, I intend to emphasize the importance of Investors Relations,which more than often had been either overlooked or lightly taken as Corporate Public Relations, should be properly tackled by the Boards of Directors of the publicly listed companies, so as to raise the standard of Corporate Governance for which they are accountable for.

The Investors Relation's primary function is to ensure that the company's information is released in a fair and trustworthy manner. These recipients comprise of its shareholders and stakeholders such as its investors (retail and institutional, domestic and foreign), as well as the analysts and media who may analyze and comment its performance accordingly. These information also have strategic, financial and legal implications. Therefore, due care and diligence is required to handle such information.

The IR is to update its' current and prospective stakeholders about the company's long-range strategy; short and medium material events that may likely affect the company's performance. By doing so, it will only enable its shareholders to make informed decision based on their risk appetites and objectives.

Thus, it establishes a communication platform so as to regularly update and interact with its stakeholders; more than just issue occasional press release when a new product is launched, or a dividend is declared, or a senior executive moves. Hence, it serves as an additional avenue apart from relying on the normal means of communication such as AGM, the annual report and quarterly results. 

An effective Investor relations need to function strategically on a proactive basis so as to give comfort to shareholders to buy and hold its shares and not only purely rely on their individual risk appetites and time horizons.

Role of the board of directors

To ensure the IR achieves its end, its board of directors need to constantly review and approve its IR strategy in line with its values and cultures. Efforts of monitoring its progress on a regular basis need to be taken seriously. As usual, the boards not only need to share the significant and material information on trends that likely to affect the company, its peers and the industry as a whole, but also need to provide regular inputs and feedback regularly so as to improve its IR programme.

Role of the audience

On the other hand, the company’s audience may provide feedback on these given strategic, financial and legal information or use this information to profile the company either positively or negatively especially the media. In return, they may then use their independent analysis to recommend to the investing community – both retail and institutional.

IR function

The IR function must act as a two-way communication channel because it has two roles. On the one hand it must analyse the ownership structure of the company to identify the characteristics of various target audiences and how they perceive the company and its actions, making sure that the information regarding strategy, finances and any legal issues are disseminated appropriately so that the target audiences can make informed decisions on material matters. On the other hand it must analyze audience feedback and update the board on how the market sees the company both in absolute and relative terms – absolute as far as decisions taken or announced are concerned; relative as far as comparing the company with its peers as a desirable investment.

IR Benefits

A successful IR programme always serve as an effective communication channel between the company, the financial community and other stakeholders resulting in fair market valuation of its' company's shares. Consequently, it enables the company to access to its required funds with a much cheaper rate from both its lenders and investors due to the lower risk premium that are demanded. 

Moreover, a strong and long term relationship with its loyal retail and institutional shareholders can be easily achieved so as to ensure the stability of the company's share price especially in bad/uncertain investment's climate.

Thanks and seeing you again.

James Oh

Skype me at james.oh18