It is not easy being government-linked companies (GLCs) or government-linked investment companies (GLICs) in Malaysia. When one or a few of them make it to the news for all the wrong reasons, none of them is spared censure and condemnation.
Bad habits make bad press. They know this, yet some just can't help themselves. No, we are not talking about FashionValet. This is still in the realm of too much speculation for it to be worth an NST Leader. We leave that to the Malaysian Anti-Corruption Commission, whose job it is to separate facts from speculation.
Today's Leader is about the responsibility and accountability of government companies funded by the public purse. As GLCs and GLICs come designed with a public purpose, they need to pay heed to the two principles of governance. These aren't private companies, but government-linked ones funded by taxpayer money. They must behave as such.
Paying a RM210,000 bonus to a chief executive officer (CEO) when the GLIC met only 42 per cent of its key performance indicators is not only a sign of missing oversight but irresponsible corporate behaviour.
A "D" grade performance such as this one doesn't deserve any bonus, let alone a humongous one. The board of directors and the CEO must be held accountable, not only for the poor performance but also for such lavish perks.
But this isn't a reason for doing away with GLCs and GLICs, though such arguments had been advanced by many. This is based on fake economics that argues that big government is bad for the economy.
Public companies crowd out private companies from the market, these Milton Friedman think-alikes assert. Nonsense on stilts is our response. There is no economy in the world where there is no big government. There is plenty of room for government and private companies to operate in one market. The free market is a figment of Friedman's imagination.
But this isn't a pretext for GLCs funded by the public purse to behave like private ones. Five years ago, in January, this newspaper shocked the nation when it brought to attention the lavish salary and perks top officials of GLCs were receiving: RM5.5 million a year on average. This is when the prime minister was being paid just over RM1.2 million a year.
Is managing a GLC or GLIC more complex than managing a country? Certainly not. For the board of directors to have approved a remuneration package that was five times that of the prime minister is certainly a case of shirked responsibility of oversight. Judging by a report by an English daily on Friday about CEOs' holiday perks amounting to RM1 million, they have not ended their errant ways.
Transforming GLCs and GLICs is the only answer to end such wayward ways. We are glad that a review of their governance is underway. We are glad, too, that the Audit Act 1957 comes with amendments that empower the auditor general to audit any entity that receives public funds. But we can have all the laws in the world, but what good are they if enforcement is weak? Many board members and senior officials of GLCs and GLICs have failed, but have not been held accountable. This, too, needs a review.