GLC senior managers’ pay should commensurate with duties
KUALA LUMPUR: In order to run government-linked companies (GLCs) professionally, their senior manager salaries should not be set above or below market rates; instead, they should be competitive in line with the challenges and responsibilities tasked in managing businesses of similar importance and size.
Assistant Professor of Management at Asia School of Business Dr Renato Lima de Oliveira said Malaysia has world-class companies that require top talent and the GLCs would have to offer competitive salaries in order to recruit and retain them.
“If you don’t offer competitive salaries, you might end up without the right mix of people running top companies: You will get those who could not get a job elsewhere because they are not top talents or those who are driven by a political agenda, which may conflict with good management,” he told Bernama
How do you think the industry you are in will evolve in the future? I think it is embracing growth. We see potential especially in the region. Definitely, consumer and passengers are now able to fly across seas and experience the culture and what not. I see growth in the future. The industry itself is embracing new technologies. If you notice we are obviously one of the proponents of technology from day one, when you had to purchase our tickets online, even when websites were very new, we were already there. I think we are improving and embracing more technology as we go forward. We are moving in that direction as it is, hopefully the consumers continue to fly with us.
What advice can you offer those looking to start their career/own business? Upon graduating, getting yourself into the working life is as important as the first day in college. It is a learning experience. I believe no one can come out and immediately be an expert in everything but life in the professional path will teach you the rights and wrongs. Also, on how your services are required to a certain degree and this can be in any form, say your expertise lies in accounting, economy. Continuing to endure in an email interview recently.
De Oliveira was asked to comment on Prime Minister Tun Dr Mahathir Mohamad’s warning that the days of top executives at the country’s GLCs drawing fat salaries regardless of their companies’ performance were over.
Citing an example, de Oliveira said aspiring politicians might be willing to run companies with below market salaries for a comparable position in the private sector in order to get public exposure and build connections, but investment decisions for political gains could come into conflict with what was best for the sustainability of the companies.
“In economics we call this adverse selection. This should be avoided as it can also open the door to corruption, which the government wants to avoid,” he said, adding that state companies had historically served, in many developing economies, as tools to build political support, just like Cabinet ministers.
De Oliveira, who is also a Research Affiliate at the Massachusetts Institute of Technology, noted that it was important to shield GLCs from political pressure and from the turnover in government and Cabinet positions, while stressing the importance of transparency.
“If GLCs are more open about their activities, expenditures, and contracts, it discourages mismanagement and corruption. But disclosure of information alone is not enough. Freedom of the press is critical for investigative journalism.
“These are reforms that the Pakatan Harapan (government) also championed and, if implemented, will help strengthen the accountability of Malaysian companies and politics in general,” De Oliveira pointed out.
He added that the opposition parties could also play a balancing role by monitoring data, performance, and contracts.