The statistical finding that GLCs crowd out more investment than they stimulate makes sense intuitively. But, as expected, the divestment project targets smaller entities within its massive portfolio and has progressed behind schedule. In this regard, one has to carefully study why GLCs should be present in retail, construction or property development, for instance.
For example, the OECD recommends that SOEs follow international accounting standards, have an external audit, and produce annual as well as quarterly reports, he said in an interview with The Edge Financial Daily following a closed door meeting between the OECD and representatives from 13 Asian countries here recently.
Some of the key elements include a requirement for SOEs to ensure a level playing field and fair competition in the marketplace when SOEs undertake economic activities.
Because they are an Open Government Partnership implementing country, this helped by making what they call an Integrated Corporate Reporting System, an online repository of information on all their SOEs, which adheres to open data standards — something our GLCs could surely learn from.
Third, the guidelines also recommends that SOEs should observe high levels of transparency and are subject to the same high quality accounting, disclosure, compliance and auditing standards as listed companies. Finally, the boards of SOEs should have the necessary authority, competencies and objectivity to carry out their functions, acting with integrity and being held accountable for their actions.
In the Philippines, the government set up a Governance Commission inwhose role is to govern SOEs using performance scorecards, with an emphasis on transparency. Although there are some exceptions, the rule of thumb is that the government has to ensure SOEs act in accordance with commercial considerations ie in a non-discriminatory manner in its purchase or sale of goods and services.
Interestingly, criticisms of the BCIC never oppose the policy objective of Bumiputera participation and ownership. Amid the misinformation, the program lacks a clear plan on how to move away from overt Bumiputera preference.
In this regard, one has to carefully study why GLCs should be present in retail, construction or property development, for instance. A fuller transformation would entail ensuring that these Bumiputera business empowerment programs are conducted effectively, so that transition plans can also be developed to phase out overt ethnic preferences.
The BCIC passed through various phases, from reliance on state development agencies, to heavy industry, then to privatisation from the late s until the Asian financial crisis, which saw the renationalisation of many failed companies.
This is only partly correct: Specifically, board composition should allow the "exercise of objective and independent judgment", and mechanisms should be implemented to avoid conflicts of interests that prevent board members from acting objectively, and "to limit political interference in board processes".
The new government has correctly highlighted the need to include certain off-balance-sheet items and contingent liabilities such as government guarantees and public-private partnership lease payments in any complete assessment of debts outstanding.
The new government has committed itself to addressing corruption and improving the management of public resources. The latter is a drain on public resources and a tax on consumers. And like in most other countries, there are good and bad GLCs in Malaysia.KUALA LUMPUR: Malaysian government-linked companies (GLCs) could do with more transparency, in accordance with one of the key guidelines of the Organisation for Economic Co-operation and Development (OECD) on the governance of state-owned enterprises (SOEs).
Nov 25, · GLCs in Malaysia are owned by the federal government through seven government-linked investment companies (GLICs), namely Khazanah Nasional, Permodalan Nasional Berhad, Kumpulan Wang Simpanan Pekerja, Kumpulan Wang Persaraan, Ministry of Finance Incorporated, Lembaga Tabung Angkatan Tentera and Lembaga Tabung Haji.
Government Link Singaporean Companies (GLC) with non-GLCs in , where each has a different set of governance structure, the key difference is government ownership.
In one of its post-independence industrialisation plans, the Malaysian government introduced a proactive entrepreneurial role by establishing state enterprises, which were later called government-linked companies (GLCs). Mar 16, · GLCs or government-linked companies are known by several names in Malaysia.
The names include Government-Linked Investment Companies, Sovereign Wealth Funds, Strategic Development Company, State government subsidiaries and subsidiaries of Government Agencies and Religious bodies and so on.
Abstract: Government-linked companies (GLCs) play an important role in the development of the Malaysian economy.
However, overall public perception of GLCs in Malaysia has been tainted by the poor performance.Download