Merit should be basis for GLC appointment, says expert

 

Access to the boardroom must be based on merit and qualification rather than political affiliation, says Institute of Corporate Directors Malaysia CEO and president Michelle Kythe Lim. (Freepik pic)

PETALING JAYA: Appointments to the board of directors of government-linked companies (GLCs) should be based on qualification and meritocracy, according to the Institute of Corporate Directors Malaysia.

These criteria must be met, whether or not they are politicians, its CEO and president Michele Kythe Lim told FMT Business.

She said that an objective and well-structured external evaluation would generate the right conversations to identify the improvements needed in the criteria for GLC board appointments.

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“It is critical for companies of all types and sizes to have a clear, rigorous and transparent process to identify and appoint the right director candidates who can bring value to the table,” Lim said.

Terence Gomez.

In an interview with FMT, economist Terence Gomez had proposed that Putrajaya consider barring politicians from being appointed to the boards of GLCs.

His comments were made in response to a government disclosure that the upcoming political funding bill could include a provision to prohibit donations to political parties from GLCs that have contracts with the government.

Political appointments to GLCs has become a common practice in Malaysia.

Many politicians are said to have been appointed to head GLCs in return for work done for the winning party, or for swinging support in favour of the party leader.

However, the issue is not so cut and dried.

For the record, some GLCs have been set up to meet public needs, and politicians, being representatives of the people, would be in a better position to ensure that those objectives are met.

Nonetheless, the issue persistently surfaces, and various allegations of conflict of interest hog the headlines or social media when such appointments are made.

For instance, in February 2020 a political impasse following the collapse of the Pakatan Harapan government was eventually resolved by several MPs crossing the aisle. Some have concluded that their move was in return for promises of cabinet posts or seats on the boards of GLCs.

Shortly after the formation of the Perikatan Nasional government in February 2020, four career politicians were appointed as head of GLCs. They were Padang Terap MP Mahadzir Khalid at Tenaga Nasional Bhd, Lumut assemblyman Zambry Abd Kadir at Malaysia Airports Holdings Bhd, former Johor menteri besar Khaled Nordin at Boustead Holdings Bhd, and two-term assemblyman Megat Najmuddin Megat Khas at Sime Darby Plantation Bhd.

In August 2021, Mahadzir left Tenaga to join the Cabinet as rural development minister. In the same month, Khaled also left Boustead.

As Gomez told FMT Business in a previous interview, abuses start when politicians manoeuvre for positions.

Once appointed, they are expected to dole out contracts to their supporters who are then expected to use the funds to finance political activities, he said.

Nonetheless, he acknowledged that the GLC system in Malaysia is not without merit as it could be tapped for public good in times of crisis, given that it is not beholden to seeking profits alone.

He pointed out that when the Covid-19 pandemic hit, finance minister Tengku Zafrul Aziz utilised various GLCs such as banks, utilities and telcos to help by offering loan moratoriums and discounts.

The World Bank noted that in many countries, state-owned enterprises help to keep people employed and the economy humming. Some of them got involved in the Covid-19 war by producing ventilators, masks and vaccines.

However, it becomes a problem when the GLCs are misused as a source of unlimited financing for politicians. - FMT