The company’s share price down. Moreover, the company will

The construction companies with business probity
risk often lead to poor publicity. In general, senior management is not aware
of the omission and errors in the internal control system and risk management
policies, resulting in poor business performance. If company cannot solve the
issue proper, the company’s stakeholders will lose confidence in the company,
resulting in the company’s share price down. Moreover, the company will be
required to change its management team or reorganize its structure through the
board of directors. Reorganizing the organization, implementing new internal
controls and hiring new management teams are costly and waste a lot of
resources and new management teams take time to adapt to corporate culture and
the environment. More seriously, companies may lose the opportunity to bid on
construction projects with other competitors, as bidding for construction
projects requires substantial cash and resources. Even if the bid was
successful, the company was unable to hand over the building and infrastructure
to the public after the construction project was completed because people did
not believe companies with management problems.

Compliance with regulations is a must for all
construction companies because the construction process is complex and
dangerous. If does not aware of it, the quality and safety of social
construction may be affected. That why the regulator bodies like CIDB establish
several of rules and regulation for monitoring and guiding the construction
company. Every step of the construction process has its own requirements must
be completed, otherwise the construction process cannot continue or forced to
stop. In general, these companies do not comply with the requirement and may
result in penalties. For An example, registration of contractors is compulsory,
meaning that they must register with CIDB and hold a valid registration
certificate issued by the Board. If fail to comply with it, the errant
contractor faces a fine of RM10, 000 up to RM100, 000 under
Section 25 of the CIDB Act 520. If the situation is serious, the company’s
license will be permanently revoked by CIDB which mean that the company have to
close down and cannot perform as contractor anyone. Companies that are at risk
of compliance have always had difficulty getting government or private sector
construction projects. Not only that, the company may be prosecuted because of
non-compliance with laws and regulations and bear huge legal costs. Even win
the lawsuit, the company’s reputation is irreparable.

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Health, safety and environmental risks are issues of
concern to construction companies and always negatively impact the company.
When an accident occurs at the construction site, the construction company have
to bear the responsible for not having proper health and safety policies in the
company. Not only that, companies may be forced to stop construction projects
for regulatory agencies to investigate. Once regulators find that security
measures do not meet the standard requirements, the company may be prosecuted
or fined. And also, company have to pay compensation to the workers who get
injuries from the accident. This incident may cost the company a lot and
company’s license may be revoked by regulator. Moreover, after the completion
of construction works, the company has the responsibility to consider a safe
environment and a good landscape environment, otherwise the company will be
public complaints and fined by the regulatory body.