Do not appoint politically-linked people to GLC boards, says G25

PETALING JAYA: The Government should not appoint any politically connected persons to the board of government-linked companies (GLCs) and statutory bodies, the G25 group of eminent Malays says.

This call was in line with the GLC Transformation Programme, aimed at introducing good corporate governance into the management of government-owned companies, it said.

It added that one rule in corporate governance was that no politically connected person should be appointed to the board.

“This rule is applied by Bank Negara in the banking and financial sector and in the Khazanah Group of companies.

“The Government should extend this principle to all statutory agencies and their business corporations,” said G25 in a statement.

It further said that the Government should learn from the experience of the “political tussle” in Felda Global Ventures Holdings Bhd (FGV) and the “financial failures” in several government-owned enterprises.

“FGV, with Felda as the majority shareholder and Ministry of Finance Inc having the golden share in the company, gave the Government ultimate power over the board.

“There is heavy political presence that makes good corporate governance difficult to achieve,” it added.

G25 also said the Government should consider divesting its large stake in the economy and limiting its corporate ownership to strategic sectors like utilities and infrastructure.

This was because banks were reluctant to give loans to government-related companies operating commercial businesses and required such loans to be covered by collateral or government guarantee letters, the group said.