PETALING JAYA: Government-linked companies (GLCs) must face the consequences of losses like any private company, says an economist.
This follows Prime Minister Datuk Seri Anwar Ibrahim’s announcement in the Dewan Rakyat yesterday that hefty bonuses will no longer be granted to heads of GLCs that are making losses.
CEO of the Centre for Market Education Dr Carmelo Ferlito emphasised that true efficiency can only be achieved by opening markets currently controlled by GLCs and subjecting them to full market competition.
“I agree with the spirit of the move, but that spirit will be fully implemented only by making GLCs fully responsible for their losses, if any, just like private companies,” he said when contacted.
He argued that GLCs can only become more efficient when they face the real consequences of market competition, and called for more market liberalisation to achieve this goal.
Meanwhile, Malaysian Trade Union Congress (MTUC) president Mohd Effendy Abdul Ghani said the shift in the policy is a crucial step toward ensuring greater accountability and responsible financial management within state-linked enterprises.
“MTUC commends the government’s commitment to aligning bonuses with actual performance, especially during this period when public resources need to be managed efficiently to support economic recovery.
“It is vital that GLCs, as significant contributors to the national economy, operate with financial discipline and deliver tangible outcomes,” he said.
While MTUC agrees on curbing unjustified bonuses, he said it is also important to set up clear and fair criteria for performance evaluation.
“It is essential to distinguish between individual, team and company performance to maintain employee motivation and ensure that high performers are still rewarded appropriately.
“By recognising individual contributions, this approach will sustain productivity and morale within GLCs,” he added.
Mohd Effendy said transparency is key to the successful implementation of the new policy.
“The guidelines for performance assessment and bonus distribution should be clear, well-communicated and accessible to all stakeholders, including employees and the public,” he added.
He also said that MTUC welcomes the Auditor-General’s audit of all 2,000 GLCs beginning next year.
Transparency International Malaysia president Dr Muhammad Mohan said all bonuses paid to employees and directors must be disclosed explicitly in the company’s annual report and annual general meetings.
“That transparency is so that shareholders can raise questions and the board will have to explain,” he said when contacted.
He also said GLC and GLIC board members should only consist of professionals who acknowledge that the first priority of business is making a profit.
“Only then can we talk about bonuses and more aspects like corporate social responsibility,” he said.
Muhammad said he welcomed Anwar’s decision to stop the practice of hefty bonuses despite poor performance, but he hoped the Prime Minister would relook the board composition of all GLCs and GLICs.
“We have an abundant number of professionals in this country who can serve there and add value to the business.
“Companies that do not perform or show losses for three years should have the entire board and chief executive officers replaced,” he added.
