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E3 Journal of Business Management and Economics

E3 Journal of Business Management and Economics Vol. 2 (4) pp. 156-163, October 2011; © E3 Journals; ISSN 2141-7482

An introspective view of corporate governance issues within the structure of government Link companies (GLCs)

Suraiya Ishak * , Ahmad Raflis Che Omar
School of Social, Development and Environmental Studies, Faculty of Social Sciences and Humanities, Universiti Kebangsaan, Malaysia 43600 Bangi Selangor, Malaysia.
*Corresponding Author E-mail: suraiya@ukm.my
Accepted 10 September 2011

Abstract

This article explores the corporate governance issues pertaining to the Malaysian government owned companies. From the analysis, two governance issues have been identified to be connected to the structure of government link companies (GLCs). The first issue involves the extent to which the managerial agents have served in accordance with the judgment of the best interest of the company. The second issue relates to the expropriation of the minority shareholders’ right arising from the prioritization of the government and national agenda over the minority shareholders’ interest. As a result, governance within GLCs is relatively intractable as the conflicts had surged from disparity of objectives held by the substantial owner (the government) and other minority stakeholders. In a nutshell, a crisis may potentially emerge due to the ownership structure which leads to a quasi private-government type of entity, thus imposing unique challenges for its governance execution.

Keywords: Keywords: State enterprises; Government link companies and Corporate governance.

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