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Only qualified to sit on Boards: New measures next year to ensure GLCs perform
Published on: Saturday, December 02, 2023
By: Larry Ralon
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Only qualified to sit on Boards: New measures next year to ensure GLCs perform
Masidi said the State Government through Financial Circular Number 7 of 2001, on the Policy and Guidelines for Dividend Payment by State Government GLCs, stipulates that State Government companies must pay at least 10 per cent of dividends from the company’s profits to the State Government.
Kota Kinabalu: The State Government will ensure Government Linked Companies (GLCs) perform to expectations by implementing a State Public Agency Governance Improvement Plan that includes appointing only qualified people to sit as directors in the various subsidiaries.

It would also bring in expert auditors to conduct audits and reviews of troubled GLC companies, State Finance Minister Datuk Seri Masidi Manjun told the just-ended State Legislative Assembly (DUN) sitting.

Masidi said a careful examination of these financial statements would help State public agencies to identify risks and find ways to either defend or repair the business and activities carried out.

Among the initiatives to be implemented next year are:

Appointment of Board of Directors to be based on set criteria such as experience, professionalism, qualifications and competence.  This is to ensure check and balance in every appointment;

(b) Implement the Score Card System as a performance benchmark to help monitor and improve accountability of the appointed Board Members; Implement the Merit Demerit System as a monitoring strategy for State public agencies and enforce rules and laws through the Corporate Governance Regulatory and Compliance Committee to ensure public agency activities are carried out efficiently, prudently and effectively. 

The implementation of these systems aim to strengthen the existing State Company Information System (SCIS);

(d) Establish an Investment and Loan Management Committee of State public agencies to ensure investments implemented can provide profitable returns, help State public agencies realise potential business proposals and ensure that the interests of the State Government are safeguarded; and

(e) Gazette the agency for auditing in order to give a true and fair picture of the financial position and records thereof are maintained in an orderly and up-to-date manner. 

It would also collaborate with the Malaysian Anti-Corruption Commission (MACC) in assessing whether financial management at State public agencies has been carried out transparently and with integrity in accordance with relevant financial laws and regulations.

Masidi said the State Government through Financial Circular Number 7 of 2001, on the Policy and Guidelines for Dividend Payment by State Government GLCs, stipulates that State Government companies must pay at least 10 per cent of dividends from the company’s profits to the State Government.

“I would like to emphasise that if excess profit is obtained for a financial year, the dividend percentage should be increased to the highest level without affecting the financial position of the company.

“To ensure that dividend payments from each GLC are carried out, the State Government will also improve the circular on dividend payments and the Governance Code Book of Statutory Bodies,” he said, adding that action would be taken on GLCs that suffer losses.

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