The contract of Employees Provident Fund (EPF) CEO Datuk Shahril Ridza Ridzuan, which will expire next month, has been extended by another three years.

Shahril to stay on as EPF CEO


Monday, 26 Mar 2018

Strong dividends: The EPF under Shahril has seen a purple patch of returns with members enjoying solid dividends. — Bernama



PETALING JAYA: The contract of Employees Provident Fund (EPF) CEO Datuk Shahril Ridza Ridzuan, which will expire next month, has been extended by another three years, said a source.

Shahril was among three heads of large institutional funds that would have seen their contracts expire within this and next year, with the other two being Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar and Retirement Fund Inc (KWAP) CEO Datuk Wan Kamaruzaman Wan Ahmad.

Azman has been with Khazanah since June 2004 and will see his contract, if not renewed, expire in May next year. For Wan Kamaruzaman, his contract with KWAP will finish in April 2019 but he will only approach retirement age later that year.

Shahril’s contract extension will bring some stability to the EPF as deputy chief executive officer (investment) Datuk Mohamad Nasir Ab Latif will reach the age of retirement later this year.

The EPF under Shahril has seen a purple patch of returns with members enjoying solid dividends since he has been the fund. The dividend rate of 6.9% declared last year was the highest since 1996 when the EPF paid a dividend of 7.7%.

He was previously deputy CEO (investment) of the EPF from December 2009 until he was appointed CEO in April 2013. Between 2009 and last year, the dividends declared by the EPF has been trending upwards except for 2015 and 2016, the years when the local stock market fell.

These large institutions play an important part in providing solid returns for retirement and provident funds and also to engage in strategic investments for the country. The EPF and KWAP generally play the role of providing retirement returns, with the EPF directly investing on behalf of members and KWAP growing the fund to one day take over the mushrooming pension liabilities of the Government.

While EPF and KWAP invest large amounts of money in listed government linked companies (GLCs), Khazanah Nasional is the controlling owner of many GLCs.

Permodalan Nasional Bhd, which controls Malayan Banking Bhd

image: https://cdn.thestar.com.my/Themes/img/chart.png, the Sime Darby group and SP Setia Bhd

image: https://cdn.thestar.com.my/Themes/img/chart.png, saw a change in its top positions in 2016 when it appointed Tan Sri Abdul Wahid Omar and Datuk Abdul Rahman Ahmad as chairman and CEO respectively.



Their appointments were made when there was a need to address the declining performance of the fund.

With the financial muscle and corporate ownership those institutions wield, the need to make sure the right and credible persons are appointed to the crucial management positions could not be understated.


“I have been witness to periods of massive leakages and value lost at times when we had poor leadership, and excellent value accretion when we had great leadership.

“Of course, board members and other management positions are also important but the CEO is the crucial job and we must get it right.

“They are tough jobs; stakeholder balancing is much more complex than for the corporate CEO,” said CIMB Group

image: https://cdn.thestar.com.my/Themes/img/chart.png chairman Datuk Seri Nazir Razak.

Succession planning has been ingrained within the GLCs ever since the GLC Transformation Programme took off in 2015. In improving the performance of GLCs, which was spearheaded by Khazanah Nasional, a series of books were published and one in particular, the Green Book on Enhancing Board Effectiveness, dealt with the need for proper succession planning.

“A critical role of the board is to select the CEO based on the context of the company – including current performance levels, competitive landscape, and aspirations of the company. Similarly, the board should establish a clear succession model.

“Selecting the CEO is the most significant task for the board as, ultimately, the CEO is the person responsible for the operation of the company. More and more, investors are insisting that boards have a credible CEO succession plan in place,” said the book.

Khazanah Nasional has a succession plan in place and has promoted two executive directors as deputies to managing director Tan Sri Azman Mokhtar. Under Azman, the value of Khazanah Nasional’s investments hit an all-time high of RM115.6bil last year.

The appointments, which should quash speculation of external candidates replacing Azman, sees Ahmad Zulqarnain Onn and Tengku Datuk Seri Azmil Zahruddin Raja Abdul Aziz promoted to the role of deputy managing directors effective Jan 1, 2018.

Wan Kararuzaman is also said to have in place a succession plan to take over his role should he retire.

While having a dependable succession plan is important, some argue that the credibility of the CEO might be more important.

“Institutions have internal succession plans in place but it is more important if the right individual comes in,” said a fund manager.

He points out that many of the losses by some government companies have been due to poor leadership.

“If a new person is to be appointed, then he or she must be better qualified than the person who is being replaced. The reasons for change have to be right,” he said


Read more at https://www.thestar.com.my/business/business-news/2018/03/26/shahril-to-stay-on-as-epf-ceo/#vY7VKQbmiGABCXoQ.99