Edmund Terence Gomez, who has authored books and papers on Malaysia’s GLCs, said it is crucial that such appointees – even if they are political – be able to expertly navigate the choppy economic waters with a mix of astute political know-how and a deep understanding of policy-making.
He said this is especially crucial considering how GLCs have long been deeply embedded in the corporate sector with key positions traditionally doled out as a patronage tool to reward politicians and their supporters.
“This sends a very important signal to the private sector and investors, both domestic and foreign, as GLCs constitute a huge component of publicly listed companies,” Gomez said.
“If you look at the top 10 publicly listed companies, eight are GLCs. In terms of market capitalisation, seven GLICs (government-linked investment companies) control about 42% of Bursa Malaysia.
“So if this is going to be the new form of public governance, where the people in charge are qualified and appointed independently, and are making decisions in the interest of the economy, then this will inspire investor confidence.”
On Wednesday, Anwar said the practice of appointing politicians to head GLCs will continue if they have the appropriate qualifications and a track record in the relevant field.
Their professional ability and compliance with governance rules will also be taken into account when making such appointments, he added.
While Gomez agreed this is the way forward for GLCs, he also wants an independent commission set up to vet appointments of GLC chairmen, CEOs and board members in a transparent manner, with the appointment of the commission’s members subject to parliamentary review.
He suggested that for GLCs such as sovereign wealth funds, pension funds, or GLICs, the directors must have adequate knowledge about how these enterprises work and how their public delivery systems operate.
Gomez said they must also know how to work with bureaucrats to implement policies, adding that it was also key that appointments are made based on merit, not political pressure.
“The people sitting on the boards must understand their institutions’ roles and their public delivery systems as they (the GLCs) are not in the private sector,” he said.
“The directors need to have the social skills, knowledge and ability to ensure policies are implemented the way they were conceived. There are not many people walking around with this kind of knowledge.”
Another political economist, Firdausi Suffian of Sabah UiTM, also highlighted the need for capable hands to steer GLCs, especially as the economy recovers from the impact of the Covid-19 pandemic.
Noting that while an individual’s education level or qualifications had long been seen as the main criteria for appointment to any position, he said GLCs must now “go beyond that”.
“We need to look at competency. We need competent people who look beyond politics and are instead, focused on the country’s economic growth,” he said.
“GLCs are supposed to look at the interests of the economy as a whole. But sometimes, if you put a politician in such posts, as has been done many times before, it is very hard for them to divorce from their political interests.”