Reforming GLICs & GLCs: A 5-Point Guide To Better Governance

From political interference to unclear mandates, not all GLCs and GLICs operate on the same level. Some run efficiently under close scrutiny, while others fly under the radar, plagued by inefficiencies and governance issues. This raises a critical question: how can we hold these entities—whether at the state or federal level—to higher standards to improve transparency, accountability, and public trust?

Aira Azhari, Acting CEO of the Institute for Democracy and Economic Affairs (IDEAS), shares how targeted reforms can transform GLCs and GLICs into more effective, accountable, and transparent drivers of economic and social progress.

So in this episode of Enterprise Explores, we unpack IDEAS’ five-point framework for reform, which emphasises stronger parliamentary oversight, independent appointments, and clearer mandates to align with Malaysia’s broader economic goals.

Here are some key highlights from the conversation:

- Governance Challenges: Issues like political interference, opaque investment decisions, and lack of accountability hinder GLIC and GLC effectiveness and trust.

- FSBs, Not GLICs: Federal Statutory Bodies (FSBs) are entities established through acts of Parliament, such as EPF and Tabung Haji, to fulfill specific mandates and objectives as per their respective Acts. Unlike GLCs, which are companies incorporated under the Companies Act and often state-owned, FSBs operate under distinct legal mandates outlined in their founding statutes. IDEAS argues that using the term FSBs for organisations like EPF is more accurate.

- IDEAS’ Five-Point Framework: IDEAS proposes reforms focusing on ownership rationale, independent oversight, transparent appointments, and performance monitoring to enhance governance.

- Parliamentary Oversight: Advocating for a stronger role for Parliament in scrutinising annual reports and vetting board appointments while avoiding political meddling in operations and investment decisions.

- Independent Ombudsman: IDEAS recommends establishing an ombudsman to protect whistleblowers and ensure ethical practices within GLCs and GLICs.

- Balancing Roles: Emphasizing the need for GLCs to clearly distinguish between profit-driven objectives and social policy goals to avoid conflicting mandates.

- Future Vision: A call for the Malaysian government to act as an “active and informed owner,” ensuring institutions deliver clear objectives while maintaining professional independence.

- Cultural Shift: Addressing Malaysia’s political culture, which often rewards supporters with appointments, as a long-term goal for sustainable reform.