By Lam Kwai Soon (COO of Cheng & Co Group of Companies)
Sustainability is not a word that people generally associate with professional services unless you are referring large professional service firms with global branding and offices worldwide. However, it is still relevant and possible for small firms and companies. Furthermore, it is not about size or how well-known a brand name is but rather much more related to the nurturing of a corporate culture that enables the firm to continuously adapt to the environmental changes and provide solutions that are adequately addressing the problems that faced by the businesses.
Charles Darwin, the famous naturalist, geologist, and biologist, had once said, “It is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.” Organisations are not mechanical entities because they do consist of individuals working together to achieve common goals.
The sustainability culture of a firm is nurtured and developed by deeply implanted core values with the clear and inspirational vision and mission that imparting within the firm. The main factors that help to push for sustainability are a business model and a management system. Externally, sustainability is brought forth by developing evolutional business models that always satisfy the needs in the ever-changing market with the sustainable value delivered. Internally, sustainability stimulated by having performance-based management systems that able to recruit, identify, retain, and develop right persons.
Merger and acquisition exercises are a part of the approach that helps a firm to reach to the wider range of market geographically and hierarchically. In order to remain sustainable, Cheng & Co Group of Companies emphasises on delivering relevant solutions to the market by upholding core values that are adaptable, which includes flexibility and innovation with execution that walking our talk.
When undergoing any merger and acquisition exercise, our ability to impart our corporate culture and practices among personnel absorbed from acquired and merged firms is one of the chief considerations that we bear in mind before making any decision. As a result, they help Cheng & Co Group of Companies to remain sustainable. However, in addition, Cheng & Co Group of Companies has also taken bold steps to further strengthen our business model platform in Malaysia.
On 22 June 2022, Cheng & Co Group of Companies, via their holding company, CC International Berhad, listed in the LEAP Market of Bursa Malaysia. It will not stop there. It is the vision of CC International Berhad to list in the ACE or Main Market of Bursa Malaysia.
Listing in LEAP Market of Bursa Market
In 1993, Cheng & Co was established with a vision to becoming the leading homegrown accounting firm. In 1998, Cheng & Co took their first step into becoming Cheng & Co Group of Companies by incorporating their taxation practice into Cheng & Co Taxation Service Sdn Bhd.
From then onwards, Cheng & Co Group of Companies grew through mergers and acquisitions exercises. As a result, we have become a multidisciplinary professional solutions provider. We are not providing just accounting, company secretarial, or taxation services. Our value is solving our clients’ business issues. Our clients do not always face just one problem.
On the other hand, being multidisciplinary is only one half of the business sustainability equation. The other half is listing in Bursa Malaysia, which allow the professional solution platform to be corporatized to inspire more of our young professional entrepreneurs to press on towards business sustainability. In 2018, we had to decide whether we should proceed. It was a difficult decision as it is not an easy process. Apart from the immense scale of the entire project, we also had to consider that our audit practice was our largest source of revenue.
As per Malaysian regulations, the independence of audit is strictly required. As such, we decided that to spin off audit division from Cheng & Co Group. So, our partners, directors, and managers went a monumental trip to climb Mount Kinabalu in September 2018. Inspired by the determination shown during the trip, we took it upon ourselves to address every challenge so that we could list Cheng & Co Group.
Upon spinning off, the former audit partners now carry on their audit practice as Chengco PLT, which is separate from and completely independent of Cheng & Co Group of Companies.
Going Beyond Corporate Services: Multi-Family Office Solutions
We are a client-centric company. Accounting, taxation, company secretarial services, and other conventional corporate services are still relevant to our clients. However, the world today is more complex than yesterday, and it will get more complex tomorrow and the days after. Problems get more complex, and so do solutions.
Our clientele is made up of ambitious and performing SME companies that need more professional guidance to do even better but, like us, they want to achieve sustainable business growth. This is the premise of our multidisciplinary approach to solving our clients’ business issues. Many SME companies in Malaysia and neighbouring countries are owned and managed by entrepreneurial families.
Managing family legacy of business families who are managing family businesses is very tricky. Traditionally, people often managed their family legacy and family businesses as one. This is not a good idea. Why is this so? Firstly, it exposes family wealth to the risk of business failure. Secondly, it exposes business resources to personal spending.
So, this is where family offices step in. Family offices are dedicated to help high-net-worth families manage their wealth, particularly when passing on wealth, including control of family businesses, from generation to generation with proper structure and mechanism that reduces the risk of family disputes.
Maintaining Links with Industries and Society
No business stands alone. Businesses are run by people to benefit people. Therefore, Cheng & Co Group of Companies goes beyond doing business. Contributing to overall sustainable development is key to our sustainable business growth.
In 2023, we have taken more steps to contributing to sustainability. In June 2023, our Executive Chairman, YBhg Dato’ Dr Chua Hock Hoo, was elected a board member of Financial Planning Association of Malaysia (FPAM). As a socially responsible business, we, led by our Executive Chairman, are also committed to helping FPAM to make FPAM members ready to enter the family office market through the sharing of our knowledge and experience.
Furthermore, in July 2023, Cheng & Co Group of Companies signed a memorandum of understanding (MOU) with Malaysian University of Science and Technology (MUST). We will work with MUST in order to produce an industry-relevant diploma of accounting programme that will see students trained in accounting as well as digital accounting skills, and work in Cheng & Co Group of Companies as interns in order to gain practical experience.
We believe that a financial planning industry ready to provide family office services, and a national pool of accounting graduates that are skilled in digital accounting will contribute to the betterment of the economy and wellbeing of society, and, also contribute to our sustainability.
What is Next?
We hope to be listed in the Main or Ace Market of Bursa Malaysia by 2025. Cheng & Co Multi-Family Office Solutions will attract more entrepreneurial families to family office services. Cheng & Co Group of Companies will continue to work with the academia to bring in more capable professional service graduates and also with more professional associations such FPAM in order to bring in more skilled professionals in the market.