Building up director’s pool for government-linked companies (glcs): consideration for extended qualifications of board members

The nomination or selection process for appointing directors to corporate board. like other aspects of corporate governance, affects corporate decision making. Appointment of appropriate and qualified board members is therefore an important aspect because the board is always perceived to play an important role in the performance of the company. The link between politics and business in Malaysia can no longer be avoided. However, the government’s involvement in business has demonstrated how the government and business work hand in hand to conceal the evidence of wrongdoing and malpractice of corporate governance in Malaysia. The corporate malpractice in Perwaja, Renong, MAS and Proton for example were the evidence of corporate governance failure of GLCs. The GLCs failures have prompted this research in the light that there is a general perception that the government has appointed unqualified persons to sit in the board of GLCs. The rationale of appointing suitable persons to sit in the board of GLCs is because public funds are at stake, and appointing persons such as crony is actually against the will of the public. There should be standard minimum qualifications of GLCs directors such as academic qualifications, experiences and are not tie with any political parties in order to ensure independence of the board to make any decisions. This research aims to examine whether there is a necessity to change the existing legal rules governing how GLCs' directors are being chosen. Research methodology will be based on qualitative method of secondary data. The secondary data is library-based research whereby the information will be obtained from primary sources as well as secondary sources. The researcher has differentiate several features of appointment of directors in Thailand's State Owned Enterprises with that of Malaysian's GLCs. The expected outcome is to propose an establishment of directors' pool where the board members in GLCs must be selected from the pool. Thus, a discussion of the specific standard minimum qualifications of the members of the pool is essential. In realizing the establishment of the directors' pool, there is also a need to appoint an independent body which has power to select candidates of the pool and to appoint, supervise and remove GLCs directors.