C - Political Reform C00. POLITICAL REFORM

C12. Make the governance of our GLCs world class at par with international standards

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Jun 2018

Dr M: Pakatan govt GLC chiefs won’t be highly paid

Malay Mail June 29, 2018

JAKARTA, June 29 — The chief executives or directors of government-linked companies (GLCs) under the Pakatan Harapan (PH) government will be from among those who are truly professional and they will not be paid high salaries, Tun Dr Mahathir Mohamad said here. The prime minister said the previous (Barisan Nasional) government had put many political appointees in charge of GLCs although they lacked management capability and were paid high salaries. GLC chief executives or directors under the PH government would not be paid high salaries but they would be rewarded with a bonus if they performed well, he said. “We (the PH government) will look for professionals as far as possible; we will give preference to people who have experience in management,” he said to Malaysian journalists here. Dr Mahathir, who is on a two-day official visit to Indonesia, said 17,000 political appointments had been made by the previous BN government. “Generally, we found that these people were selected because they were party supporters but were inefficient and were paid high salaries. In the end, their management and projects failed. “The 17,000 political appointees by the previous government included some ambassadors who have no capabilities,” he said. — Bernama

May 2018

Make the governance of our GLCs world class at par with international standards


Government-linked companies (GLC) play an important role in our economy, both at the national and state level. Some GLCs are governed well, especially those included in the "G20" group, i.e. the group of 20 high- performing GLCs. But, there are still too many weaknesses. The 1MDB and FELDA scandals alone could potentially destroy the good records of the G20 companies. Even more embarrassing is the fact that we don’t even know how many GLCs exist in the country. Yet many of their cronies continue to reap the allowances from holding posts in the GLCs. The Pakatan Harapan Government subscribes to the tenets of a mixed economy, taking the principles of social market economy as our guidance. GLCs will operate in sectors that suffer from market failure, and not to compete against private companies. GLCs will be instructed to galvanize the efforts to increase Bumiputera equity holding in the country. We want to see more Bumiputera corporate leaders who are able to continue the cause of our GLCs through management buy-out. The MBO will contribute directly to the increasing Bumiputera equity ownership. The corporate governance of GLCs at national or state levels will improved so that they can make a bigger contribution to our economic growth. The Pakatan Harapan Government will ensure the appointment of state and national GLC Board members will be made based on merit and professionalism, not based on politics. To eliminate conflict of interest, the amount of allowances received by Board members of national and state GLCs will be published annually in a format that can easily be checked by the public. All GLCs will be required to create a Bumiputera vendor development programs. The Pakatan Harapan Government will adopt international standards, such as the OECD Guidelines on Corporate Governance of State-Owned Enterprises, to improve the overall governance of our GLCs. A Parliamentary Committee will be set up to receive regular reports from the Government Investment Division at the Ministry of Finance on the performance of our GLCs.