Thursday, February 26, 2009

GLCs (Sime included)

The guys running Government-linked Companies (GLCs) appear very much to be on the defensive these days. The blogosphere hasn't been very charitable to them. The GLC guys are understandably testy.

The litany of controversies involving corporate misadventures,whether past, present or prospective, that explodes into cyberspace involving GLCs is a long one. Too many for me to catalogue.

Spin control
One immediate response is to retain the services of Public Relations people. Giving issues that explode into public opprobrium a positive spin is a natural response. Like anyone, GLCs are entitled to space to ventilate their version of events.

To build better public perception, non-profit projects can be highlighted in the public domain. This is part and parcel of brand-building. No problems there either.

amanah is trust
To take Anifah Aman's point (from the preceding post) a little further, the guys (or gals) running GLCs are often seen to have forgotten that thay are in the position of a trustee. The fiduciary relationship, they seem to ignore, extends not just to PNB, Khazanah Nasional, LTAT, LUTH and similar institutional funds.

That fiduciary relationship, whether they like it or not, extends to the general Malaysian public.

Like it or not, that is how we, the public, perceive the acts or omissions of the GLCs when they plan (or plot) corporate adventures (or misadventures).

Like it or not, they are held to a far higher standard than that attached to ordinary corporations.

GLCs are, correctly (if I may say) perceived by ordinary Malaysians, as extensions of the government. That is usually interpreted to mean that GLCs will get projects that ordinary corporations will never get.

By virtue of that, the public perception is also that GLCs are quite obviously prone to abuse by the management who are ordained (I use this word deliberately) to run these humongous corporations.

That is why integrity should be at a premium for GLCs. It's not about hotshot academic qualifications. It's not about grand experiences. It certainly isn't about savvy public relations. It is, instead, all about integrity and the absolute absence of even a wafting whiff of any hanky-panky.

Spinning won't help dodgy deals
Let the the message to GLCs be crystal clear. No amount of spin control or public relations can help projects that are seen to be questionable.

The public interest must be protected at all times. Even a hint of crass profiteering will not do. That is the high standard GLCs are held to. That is why the IJN proposal was still-born. The public, correctly, doesn't want some over-zealous cashier in the Emergency Ward to turn away a patient that had no ready cash or credit card. No amount of assurance will guarantee that such a thing won't happen in a privatised hospital. But, everyone knows that such a thing won't ever happen in a public hospital.

All deals must not only be feasible and viable. There must be no whiff of a hint that any asset or business to be acquired or sold involves a party who is even remotely linked to anyone involved in the decision.

It's not just me dishing out baseless pontifications. Just pick up the Bursa Malaysia Listing Rules, it says the same thing not just to GLCs but all public-listed companies.

And, as I keep saying, the standards of scrupulousness should be even higher for GLCs.

That is why GLC managers must realise that their positions are NOT appointive or contractual. Their positions are ordained. And, with such ordination comes a responsibility of being a TRUSTEE of the ordinary Malaysian public who are the ultimate stakeholders.

Understand what that means and you will have a decent career.


Anonymous said...

Hello, de minimis. Just would like to say i'd learn a lot about economic issues just by reading your blog.

Would like to share this article i'd read about what life would be like if we're to experience a depression. It's written in the context of American society but i believe it applies to all modern societies as well. Keep on writing with integrity.

de minimis said...


Thanks for your generous remarks. The Boston Globe piece does paint a bleak scenario. But it's better to get real than to live in denial. That way, we can identify the causes clearly and think of the correct solutions.

Anonymous said...

I wish your elaborations would sink in the minds of the GLCs' CEOs as well as the highly-educated SIL! And it really beats me to see che khaleb got to be the CEO of the year! And the SIL is still tersengeh2 about his ECM-Libra deal as though nothing happened?! I think we Malaysians have a problem in equating oxbridge-educated = corporate performance & integrity.