The basic foundations of good corporate governance are responsibility, accountability and transparency.

So who is responsible for the Silicon Valley Bank (SVB) debacle? Who has been held accountable for the Credit Suisse bailout? Who were the last board appointees at Tesla, Exxon or Amazon? Chances are you have no idea.

In Malaysian private companies, who were the last board appointees at Berjaya Corp, Public Bank or DRB HiCom? In fact, can you name any director of a private company? Who are the directors of Serba Dinamik?

When politicians are involved things are different. Who are the people responsible for 1MDB? When the “trains kissed” who was held accountable? Who has just been appointed to the board of Risda, Mara, SSM or MPOB? Chances are that you will know these straightaway.

The fact is that when there is a political appointment to a company or statutory body, we know who the people are. We do not always know this for private companies without searching the web.

The critics of political appointments to GLCs and statutory bodies often overlook other basic issues, too. First, the government owns these companies and it is normal for a major shareholder to influence board appointments.

Second, the appointments are always transparent because we know who they are and we know why they have been appointed, namely because of patronage. It could hardly be more transparent.

Third, when there is any corruption, “contracts for cronies” or political interference in board decisions, political appointees are almost always caught and held accountable eventually not just in the court of law but also in the court of public opinion.

Part of the misconception that political appointments are bad corporate governance is the notion that good governance ensures that board appointments are independent, merit-based and compliant with good governance standards.

The truth is that independent nomination committees appoint people like themselves, embedding group-think and bad habits. The “he’s a good fit” rule gives positions to people with similar world views whether he or she is qualified or not. Pre-screening, interviews and even job offers are still more often made in golf clubs than in independent selection committees.

An independent commission to appoint government sector boards would be no different and would quickly be captured by vested interests in a civil service social club.

Merit-based appointments are often unheard of. Many directors of private companies are not professionals at all and most have no qualifications, experience or aptitude for board level work let alone corporate governance. Some are simply family members, and they are there for no reason other than that.

In Malaysia, the handful of director training outfits are little more than private social clubs with no accreditation to offer formal qualifications in management, leadership or governance. They also have no power or authority to conduct background checks on the people taking their courses, who they often recommend and “on-board” to companies as independent directors.

They are self-appointing, self-arbitrating, self-selecting, self-rewarding social circles for accidental manager-turned-directors who are appointed with no reference or accountability to shareholders or wider stakeholders.

As a consequence, corporate governance in private companies is often so opaque that even major shareholders, let alone minority shareholders, do not have full disclosure on important transactions. Limited liability in law as well as legal indemnity insurance protects rogue directors from accountability.

So, those who decry the appointment of politicians to GLCs or statutory bodies should perhaps reflect on the realities of life. At least, we know who these guys are, why they are appointed and how to get rid of them. You would have none of this if private sector director appointments were the norm.

The views expressed are those of the writer and do not necessarily reflect those of FMT.