CASE STUDY 2 Super Infrastructure Super Infrastructure is listed on the Bursa Malaysia Securities Berhad. The company is a medium-sized developer of infrastructure projects with three oflices in Kuala Lumpur, Penang and Iskandar Malaysia, Johor, respectively. The founder and chicf executive officer (CEO). Ricky Lee, is a high-profile entrepreneur with a penchant for a luxurious lifestyle and risky strategies. A few months ago, Lee had extravagantly spent RM250,000 on gold watches as gifts and installed a marble and gold bathroom in his office. He also bought a whopping RM1 million worth of paintings to adorn the guest area outside his luxurious ollice. Lee is a very dominant personality in the company. He has a strong hold on the company by virtue of hulding both the Chairman and CEO posts. Lee's views are hardly challenged by other board members. It is not surprising that there is hardly any debate or disagreement during board meetings. Shareholders are very concerned about Lee's dominance in the board and his pursuit of what they regarded as very risky strategies. They are certainly unhappy with Lee's lavish lifestyle at the company's expense. l.ee just brushed these concerns aside. He said, "I know how to run the business and they should just trust me to do my job." Last year's farnings were down 20%. Lee was unperturbed by the decline in earnings and boasted that he knew how to turn the prolits of the company around this year. The board of directors comprises Ricky Lee as Chairman cum CEO, four executive and two non-executive directors, and two independent directors. Three of these directors, excluding the independent directors, are Lee's close family members. The company has established remuneration, nomination and audit committees. Lee is the Chairman of both the remuneration and nonination committees. These two committees hardly meet to discuss issues such as the board's nomination and executive remuneration packages. It is widely known among hoard members and top executives that Lee regards corporate governance as irrelevant to real business. Super Infrastructure recently appointed an external auditor upon recommendation by Lee This appointment received great attention in the financial press, particularly highlighting the fact that the same audit firm also provided consultancy services on lee's acquisition strategy about 10 years ago Questions: 1 Explain the nature of agency problem that exists in Super Infrastructure. 2 Assess the corporate governance structures within the company, in light of corporate governance best practices. 3 Recommend any improvements you consider necessary for the corporate governance structures of Super Infrastructure