PUTRAJAYA: Only those who are qualified and have extensive experience as well as integrity will be appointed as GLIC board members, says Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

       He said the Principles on Good Governance (PGG) would be the sole reference to governance baseline and sustainability practices for all government-linked investment companies (GLICs).

       “To ensure the GLICs are well managed, the PGG emphasises the roles and responsibilities of the board.

       “All directors should lead by example based on principles as well as obligations in accuracy, transparency and loyalty.

       “The process of appointment and qualification of a director is given significant emphasis,” he said after launching the PGG for GLICs yesterday.

       This will ensure only qualified individuals are appointed as directors in GLICs and make the GLICs better prepared to adopt the environmental, social and governance (ESG) elements in their investment strategies.

       Tengku Zafrul also said the PGG placed an emphasis on having a diverse board of directors for the GLICs, hence recommending having at least 30% women on a GLIC’s board.

       With ESG issues such as flash floods, natural disasters, environmental pollution as well as issues closely related to social aspects such as the poor treatment of foreign workers getting more frequent, Tengku Zafrul said the government would ensure GLICs were prepared to face the increasing market demand for ESG practices.

       “The PGG recommends the establishment of a governance structure for the oversight of ESG elements in their future investment strategies.

       “There is also a need to increase capacity and expertise on ESG to ensure its future sustainability,” he said.

       Tengku Zafrul also said global data had shown that companies focusing on ESG issues managed to reduce costs, increased employee productivity, reduced various risks as well as created more jobs and business opportunities.

       “Furthermore, the Covid-19 pandemic has clearly proven that corporate companies that are always ready and practise good governance have an advantage in terms of resilience,” he noted.

       Malaysia’s GLICs consist of six organisations, namely the Employees’ Provident Fund (EPF), Permodalan Nasional Bhd (PNB), Retirement Fund (Incorporated) (KWAP), Khazanah Nasional Bhd, Lembaga Tabung Haji and Lembaga Tabung Angkatan Tentera (LTAT).

       They have total assets of RM1.7 trillion, making the GLICs one of the main pillars of the nation’s socio-economic development.