Next week in BizHive Weekly

For most countries, government intervention in business activities is inevitable. After all, the government is there to govern and ensure businesses are conducted in a fair and healthy manner that could grow the economy and benefit the people. But often, members of the government embroil themselves in corporate matters for personal gains. Following the shift in Malaysia’s political landscape earlier this year, many corruption cases involving the previous government, government-linked corporations and private firms were uncovered, leading to the implementation of new policies to ensure higher transparencies. The shift in the government and the new policies have also caused disruptions for many businesses this year. Next week, BizHive Weekly takes a look at the pros and cons of these changes and the involvement of the government in the corporate world: “Having a strong corporate culture advocating zero tolerance towards fraud is important. But without sufficient controls in place, organisations risk allowing economic crimes to fall through the cracks. Unfortunately, only 27 per cent of respondents detected fraud through corporate controls, such as suspicious activity monitoring and internal audit. Disparate processes like weak internal controls often lead to poor internal transparency, impacting trust among employees.” Alex Tan, PwC Consulting Associates (M) Sdn Bhd, partner and Forensic Services & Risk Consulting leader “Malaysia’s rapid modernisation has been attributed to its adoption of an interventionist model, driven also by GLCs. However, countervailing pressures are also present, with the ubiquity of the GLCs in the economy now viewed as seriously undermining entrepreneurial development by crowding out domestic enterprises including those owned by Bumiputeras. Government intervention through GLCs has resulted in rent-seeking activities, leading also to grand-scale corruption, a principal reason why there is considerable discontent in society with these enterprises.” Institute for Democracy and Economic Affairs “The government also appears to recognise that government-linked corporations (GLCs) could be crowding out private sector investment and standing in the way of realising private investment targets. The Economic Transformation Program (ETP) has called for a reduced role of government in business, and a programme of divestment is already in place. But the problem is on-going. It appears that GLCs are still investing in new sectors during the divestment programme. The influence of GLCs, however measured, continues to be both widespread and pervasive.” Asian Development Bank