Government-linked Companies Research Articles

Empirical Evidence of Sustainable Development Goals (SDGs) on Talent Management Practices and Employee Engagement in Government Linked Companies

Objective: The study analyzed the relationship between Sustainable Development Goals (SDGs) on talent management practices and employee engagement at Government Linked Companies (GLCs). Method: Questionnaires were distributed and gathered from 164 employees at 47 GLCs and Partial Least Square Structural Equation Modeling (PLS-SEM) technique was used to test the research hypotheses. Results and Discussion: Questionnaires were distributed and gathered from 164 employees at 47 GLCs and Partial Least Square Structural Equation Modeling (PLS-SEM) technique was used to test the research hypotheses. Among all Malaysian GLCs from various sectors available for the study, the researcher had narrowed down the selection to the 47 companies which are listed on Bursa Malaysia stock exchange (PCG, 2015). The findings discovered that four hypotheses are not supported with the finding of this study. There were significant and positive relationships between talent development and employee engagement (vigor, dedication) and talent identification and employee engagement (dedication, absorption). Originality/Value: The results of the study revealed that talent development and talent identification are pivotal in fostering employee engagement. Specifically, talent development positively correlates with vigor and dedication, underscoring the necessity for GLCs to invest in robust developmental programs that enhance employees' energy and commitment to their roles.

The Level of SDGs Disclosure Practice by Government Link Companies in Malaysia: A Conceptual Exploration

This concept paper explores the level of Sustainability Development Goals (SDGs) Disclosure practices by Government Link Companies in Malaysia in the current business environment. This study is designed to examine the level of SDG disclosure practices in companies’ corporate reporting by examining the level of Malaysian Government Link Companies (GLCs) SDG disclosure practices with publicly listed companies based on their industry segments. Drawing from the stakeholder theory, this study highlights the influence of ownership structure and board diversity, which can play an essential role in shaping the companies’ practices for SDG disclosure. Through a comprehensive review of the existing literature, the paper unravels the distinctive SDG commitments due to internal and external drivers, particularly in the country with higher concentrated ownership structures. Using stakeholder theory, a set of hypothesised relationships between SDG disclosure practices and drivers for disclosure are developed. The study emphasised the importance of nuanced understanding to improve corporate sustainability practices, accountability, and value creation. The study aims to guide future research for robust Sustainable Development Goal disclosure practices measurements framework and identify the challenges of such practices in a given economic situation. This paper's conceptual framework and discussions are intended to contribute to a broader academic discourse on the rising concern of SDG practices for economic decision-making.

Crisis Management in Malaysian Companies during Challenging Times: A review

The need for management under the context of crisis had been a huge realization after the sudden pandemic bombarded the world and give severe impacts toward the corporate sector all over the world in many aspects. Thus, this article aims to review the literature relating to the crisis management and its application by the Malaysian companies during crisis or challenging times. In Malaysia, companies suffered losses due to sudden crisis (pandemic) and companies with proper crisis management are the Government Link Companies (GLCs) as compared to the private sector companies.

Heterogeneous political connections and corporate overinvestment: evidence from Malaysian firms

PurposeThis paper examines the relationship between heterogeneous political connections and corporate overinvestment.Design/methodology/approachBased on a comprehensive Malaysian dataset of 834 publicly listed companies from 2000 to 2022, the authors employed multivariate ordinary least squares regression to test the relationship.FindingsDespite different types of political connections, the findings demonstrate a positive relationship between political connections and corporate overinvestment. In particular, the association is more profound in government-linked companies (GLCs) but weaker in firms that developed political ties through family members of ruling elites. Further analysis reveals that the “helping hand” effect is only observed in GLCs and firms with politically connected directors and businessmen, whereas the “grabbing hand” effect is observed among firms connected through board, businessmen, and family ties. Moreover, the relationship is more persistent among firms with politically connected directors and businessmen around the regime change.Research limitations/implicationsRegardless of the types of political connections, the findings show that politically connected firms tend to engage in rent-seeking through political patronage networks and high levels of government interference in resource allocation. Therefore, a more sophisticated monitoring system should be developed within the political patronage networks to reduce the likelihood of different types of political-business collusion. In terms of research limitations, the research design does not consider the influence of financial constraints and management efficiency. Future research could explore these facets to comprehensively understand the dynamics between political connections and corporate investment decisions.Practical implicationsThe evidence informs market participants about the relationship between heterogeneous political connections and corporate overinvestment, reinforcing previous findings that crony capitalism, political patronage, agency problems, and weak governance are well-entrenched in Malaysia’s emerging economy. The government should acknowledge these concerns by enacting anti-corruption campaigns and promoting a fair business environment. In the meantime, policymakers might redesign regulations and revise corporate governance frameworks to substantially reduce the value of political connections, thereby diminishing the bargaining power of politicians.Social implicationsAs corporate investment efficiency has a considerable impact on firm value, investment decisions that enhance firm value will increase share price and maximise shareholder value. Conversely, firms may damage shareholder value if they overinvest or undertake projects that do not yield sufficient. Hence, the findings of this study may assist investors in making more informed judgements, particularly by understanding different types of business-government relations, as political connections are one of the determinants of corporate overinvestment.Originality/valueThis study reveals that the degree to which overinvestment issues manifest within firms is influenced by the nature of the political connections those firms possess. This indicates that politically connected firms should not be regarded as a homogenous group of firms.

في ماليزيا: دراسة تحليلية تطبيقية (GLC) الزكاة على الشركات المرتبطة بالحكومة

This paper explores the obligation of zakat on Government Linked Companies (GLCs), highlighting a disparity where most zakat is collected from salaries despite business taxes constituting over half of Malaysia’s tax revenue. The study aims to identify the shariah ruling concerning zakat on GLCs, by examining the requirements for zakat on both the payer and the wealth. It includes an analysis of Malaysian laws and fatwas related to zakat on GLCs, assessing the current applications and the feasibility of enforcing it on these entities. The study finds that al-fuqaha’ disagree on the obligation of governments to pay zakat on investment funds, with a majority deeming them exempt, while a minority advocate for their zakat obligation. The dispute arises from varying interpretations of zakat eligibility for certain types of governments’ wealth. Despite this, several Malaysian states have issued fatwas that seems to support the minority view. However, the enforcement of these rulings may be unconstitutional, due to some misalignments between state authority over zakat and federal authority over corporations

Capital market effects of corporate transparency and sustainability: evidence from an emerging economy

PurposeThe study aims to examine the association between corporate transparency and firm value (capital market effect) and investigate whether auditor choice moderates this relationship.Design/methodology/approachThis study uses the Malaysian Institute of Corporate Governance (2017) data set, which provides scores on anti-corruption commitment, organisational transparency and sustainability of Malaysia’s top 100 listed firms. The methodology entails an ordinary pooled least square regression method for empirical research.FindingsThe positive association between corporate transparency and firm value is more evident in anti-corruption and sustainability initiatives. More importantly, government-linked companies have higher scores. Firms with enhanced anti-corruption commitment are more likely to have higher firm value, and this relationship is more evident for politically connected firms. This study also finds that auditor choice is associated with the firm value in the sampled listed firms.Practical implicationsThe findings provide implications for investors and regulators on the role of corporate transparency in an emerging capital market.Social implicationsThe study recommends that emerging market regulators continue enhancing corporate governance codes and practices to improve reporting transparency for listed firms.Originality/valueThis study contributes to the growing literature on sustainability disclosures by incorporating corporate reporting transparency, explicitly relating to firms’ commitment to anti-corruption, organisational transparency and sustainability.

The Impact of Working Environment, Salary, and Job Security on Job Satisfaction among Workers in Sarawak’s Government Linked Company: The Case of Sarawak Digital Economy Corporation

In contemporary society, work occupies a significant portion of people's lives due to the financial and economic imperatives of modern living. However, research has demonstrated that job satisfaction cannot be achieved solely through financial incentives. Therefore, it is crucial to comprehend the diverse factors that motivate individuals to work and to contribute to overall job satisfaction. This study aims to examine the relationship between working environment, salary, and job security in relation to job satisfaction, aiming to provide deeper insight into the critical factors that influence employees’ satisfaction and consequently impact their overall performance. In the scope of this research, the population to be investigated encompasses the staff of Sarawak Digital Economy Corporation, positioned as a government-linked enterprises in Sarawak region. The sample size comprises 107 participants among employees of Sarawak GLC (Government-Linked Companies). The research instrument utilized for data collection was a questionnaire and the results were analyzed using the Statistical Package for Social Sciences (SPSS). The study reveals a substantial influence of three pivotal factors- namely, the working environment, salary, and job security significantly- on job satisfaction. These findings hold significant implications, potentially serving as a valuable reference for understanding and insight into job satisfaction within the broader context of Sarawak ‘s business ecosystem. Such insights are valuable for academic research and business studies across the region.

Competitive Strategies for Corporate Sustainability

This is an exploratory study to gain insight among tax and ESG practitioners on the linkage between ESG and tax compliance. Prior studies used secondary data to examine the association between ESG and tax avoidance and reported inconclusive results. This leads to speculative discussion to support the results, among which are corporate ethics and corporate hypocrisy. This motivates the study to examine the perception among parties involved to understand their views on the relationship. A total of 22 personnel representing firms, consultants, and regulator are interviewed. We found a gap between firms and tax regulators and consultant perception of the link between ESG and tax compliance. There is also an inconsistent perception among sustainability and tax personnel in firms. Interestingly, we found only the government-linked companies perceived tax compliance to be part of social components. Our study implies that there is evidence to support negative and no relationship between tax avoidance and ESG but no evidence to support corporate hypocrisy.

A Case Study of Enterprise Risk Management Implementation and its Impact on Sustainability Performance in State Government-Linked Company

Enterprise Risk Management (ERM) is an approach that systematically assesses, treats, monitors, and reviews risks to enhance an enterprise’s value and its ability to anticipate and prepare for imminent risks. Previous studies have mainly focused on the impact of ERM implementation on financial performance, while its relationship with non-financial performance, particularly sustainability performance, has received less attention. This study aims to explore the level of ERM implementation and develop a framework to investigate its effect on sustainability performance, encompassing economic, environmental, and social aspects. The study proposes a questionnaire survey to be distributed to respondents involved in risk management implementation, such as the risk committee, risk management workgroup, and the top corporate risk working group, among state government-linked companies. By gathering insights on companies’ ERM implementation and sustainability performance, the study aims to conceptualize the relationship between the two. For data analysis, the statistical package for social sciences (SPSS) is proposed to investigate relationships between constructs and latent variables. Understanding the penetration level of ERM implementation and its impact on sustainability performance will offer valuable insights for formulating strategies to improve the overall performance of state government-linked companies.
 Keywords: enterprise risk management, sustainability performance, COSO framework, government linked companies

Linking ESG and Tax Compliance: Stakeholders' Perspectives

This is an exploratory study to gain insight among tax and ESG practitioners on the linkage between ESG and tax compliance. Prior studies used secondary data to examine the association between ESG and tax avoidance and reported inconclusive results. This leads to speculative discussion to support the results, among which are corporate ethics and corporate hypocrisy. This motivates the study to examine the perception among parties involved to understand their views on the relationship. A total of 22 personnel representing firms, consultants, and regulator from various categories of organisations were interviewed. We found a gap between firms and tax regulators and consultant perception of the link between ESG and tax compliance. There is also an inconsistent perception among sustainability and tax personnel in firms. Interestingly, we found only the government-linked companies perceived tax compliance to be part of social components. Our study implies that there is evidence to support negative and no relationship between tax avoidance and ESG but no evidence to support corporate hypocrisy. Keywords: ESG, tax, hypocrisy.

Audit Committee and External Auditors in Government-Linked Companies: Do they Play their Roles to Mitigate Earning Management?

Audit Committee and External Auditors in Government-Linked Companies: Do they Play their Roles to Mitigate Earning Management?

Policy Note: Government Linked Companies (GLCs) as Investors in Water Sector in China: Implications for Public–Private Partnership (PPP)

This paper investigates the role of government-linked companies (GLCs) in public–private partnerships (PPPs) for urban water supply in China. GLCs are corporations in which the government has significant ownership, control and influence while being registered under the same corporate law as private companies. Separate from local governments that own water utilities, they form contractual relationships with local governments (or water utilities owned by local governments) under PPP arrangements, rendering them more accountable and profit-driven. We analyze an emerging PPP model in China’s water sector, where GLCs serve as major investors, and assess their effectiveness and limitations. Our findings indicate that the involvement of GLCs improves water utilities’ performance, and the quality of their water supply services, while offering potential advantages such as stronger financial capability, higher political risk resistance capacity, and mitigation of public tension. However, concerns persist about risk-sharing, political interference, and local government control. This research contributes to understanding the evolving landscape of PPPs in China’s water sector and the potential implications of GLC involvement for urban water supply systems globally.

The Mediating Effect of Emotional Intelligence on the Relationship between Talent Management Practices and Leadership Skills in Malaysian GLCs

The purpose of this study was to investigate the relation between talent management practices and leadership skills, as well as the potential mediating role of emotional intelligence. This study accomplished its aim through a conceptual analysis by utilizing the lenses of talent management for leadership outcomes, talent-based theory, social cognitive theory, and extant literature. The study indicated that good talent management practice implementation was not adequate to develop and produce talented leadership skills in Malaysian Government-linked Companies (GLCs). The hypothesized partial mediating models were supported by talent-based theory and social cognitive theory, signifying that talent management practices with emotional intelligence will develop leadership skills. This study enhanced the use of mediatory roles of emotional intelligence to better understand the mechanism of talent management practices within the framework.

Social Impact of Sustainable Development Goals and Corporate Governance on Malaysian Government-Linked Companies – The Malaysian Perspective

ABSTRACT Purpose: To determine the public perception of the social impact of Sustainable Development Goals (SDGs) and Corporate Governance (CG) on public sector companies focussing on government-linked companies (GLCs) in Malaysia. Design/Methodology/Approach: To ascertain the social impact of SDGs and CG, a mixed-method approach of quantitative survey and qualitative interviews were employed. In this descriptive study, a purposive sampling technique was used to distribute a self-administered questionnaire to 400 respondents throughout the nation while 15 participants were interviewed. Findings: The majority of the respondents in the primary survey are aware of SDGs and have some knowledge about SDGs implemented by GLCs. However, it is interesting to note that when it comes to Corporate Governance, the major concern noted is that many programmes and projects by the GLCs are good but do not have the far-reaching effects that were expected. Originality/Value: The results of this study contribute to policymakers, regulators and practitioners by presenting the public perception on the SDGs and CG practices being implemented by the GLCs in Malaysia. The results will assist the Malaysian government in understanding the gaps between what the GLCs set out to do and how the public perceive the initiatives carried out. Improved and widespread education of the younger generation as to their legitimate rights and the benefits accruing from SDGs will enable them to articulate their needs and vocalise precise expectations from their leaders to improve decent work and economic growth in an era which is increasingly becoming competitive and combative, both locally and internationally. Keywords: SDG, CG, social impact, Malaysians.

Politik & Perniagaan dalam PRU-15: Perspektif Elit

The dynamics of the relationship between politics and business ahead of the 15th General Election in Malaysia is very interesting to be analyzed. The fall of Barisan Nasional (BN) in the previous 14th General Election has ended the dominance of the coalition of parties that dominated the accumulation and concentration of wealth at the federal level through the practice of patronage politics in Malaysia since independence. In addition to ending BN’s dominance, GE-14 also opened critical awareness among the masses about political funding and the relationship between politics and business, especially following the biggest kleptocracy scandals in history, namely 1MDB and Najib Razak. Through secondary data, this study analyzes the relationship between politics and business through the perspective of the elite who lead the parties in the 15th General Election. The findings of the relationship between the political elite and business are analyzed through the aspects of direct ownership of the political elite in private companies, ownership of the political elite in government-linked companies (GLC), ownership of the closest family members of the political elite in private companies and GLCs, as well as ownership of the closest friends of the political elite in private companies and GLC. This study also reflects the implications of the relationship between the political elite and business from the point of view of the equality of political funding which is quite critical for fair political competition in a democratic system.

The effect of political connections on firms' auditor choice decisions and audit opinions: evidence from Egypt

PurposeThis paper aims to examine how different types of corporate political connections (PCs) affect auditor choice decisions (and, therefore, audit quality) and audit opinions following the 2013 Egyptian uprising.Design/methodology/approachThis paper utilizes a unique hand-collected dataset on the type of PCs of Egyptian listed companies from 2014 to 2019. Several analyses are employed to test the hypotheses, including logit regression, probit regression and generalized linear mixed models (GLMM). A number of additional analyses are conducted to ensure the robustness of the results, including the instrumental variables (IVs) probit models and propensity score matching (PSM).FindingsThe results show that firms' choice of auditor and audit opinion is heavily influenced by firms' PCs. Companies with PCs through boards of directors and major shareholders hire Big 4 audit firms to enhance corporate legitimacy; however, government-linked companies usually retain non-Big 4 audit firms to avoid increased transparency and to conceal improper activities, including tunneling and rent-seeking. Further, the results indicate that companies with PCs through boards of directors or major shareholders are more likely to receive favorable audit opinions, whereas government-owned businesses are less likely to receive such opinions.Research limitations/implicationsThis study provides additional evidence to policymakers that binding regulations and guidelines are necessary to oversee politically connected firms (PCFs) and to enhance governance and investor protection.Originality/valueThis study provides the first empirical evidence on how corporate PCs influence the choice of auditors and the opinions of audit firms in Egypt. This paper also sheds light on the impact of different types of corporate PCs on the choice of auditors and audit opinions.

Industrialisation and Chinese big business in colonial Singapore, Malaya, and China: The transnational enterprises of Lim Peng Siang (1904–41)

While most studies of industrialisation and modernisation in Singapore have focused on the post-1960 period and the role of the new nation-state, multinational corporations, and government-linked companies, Lim Peng Siang's business career shows that these processes and engagements were already under way before the Second World War. This study seeks to foreground the dynamics of industrialisation and modernisation in the historiography of Chinese business in colonial Singapore, Malaya, and Southeast Asia through examining Lim's business career. It shows how the projects of industrialisation and modernisation that Lim and his contemporaries embodied extended beyond business and the economy, and were entangled in broader cultural, sociopolitical, and urban forces and developments in Singapore and other parts of colonial Southeast Asia, maritime Asia, and the world-at-large between the late nineteenth and early twentieth centuries. His experiences highlight the pitfalls of assuming a simple traditional–modern dichotomy, and any essentialistic and ethnic constructions of culture, and the discourses surrounding business strategy, behaviour, and thought.

ABDULLAH BADAWI’S FOREIGN POLICY TOWARDS CHINA: THREE-LEVEL ANALYSIS OF A PRAGMATIC AND IDEALISTIC DIPLOMACY STRATEGY IN A TWO-WAY COOPERATION

During his administration from 2003 to 2009, Abdullah Ahmad Badawi chose to continue the foreign policy of Mahathir Mohamad. However, he also applied a more ‘middle-ground’ approach that was neither provocative nor aggressive. This had on occasion portrayed him as a weak leader, contributing to the loss of majority seats for Barisan Nasional (BN) in the 12th general election. Nonetheless, during his tenure, there was an increase in cooperation between Malaysia and China in the educational and sociocultural fields, as well as cooperation with government-linked companies (GLCs), which had not happened before. How far did the moderate personality of Abdullah provide a significant impact on the structuring of Malaysia’s foreign policy towards China? This research will look at a three-level analysis that was conducted in assessing the foreign policy of Malaysia towards China during the period. The three levels that were analysed were international, national, and personality factors. A neoclassical realist approach was applied to look at the changing international political landscape and its impact on Malaysian foreign policy towards China. This research applied a qualitative method of obtaining primary data through structured interviews with key informants and an analytical method based on chronology—unsupported by empirical evidence from secondary data. In conclusion, the research revealed that Malaysia’s foreign policy towards China during Abdullah Badawi’s administration was a combination of ongoing maturing of relations and an increase in bilateral cooperation which had not been explored before. The research also found that although Abdullah Badawi was seen as a relatively weak leader in domestic politics, he made a significant impact on the continuity of Malaysia’s national interest, particularly in the soft power competition between the USA and China in Southeast Asia.

Political Connection Types and Corporate Tax Avoidance: Evidence from Malaysia

This study examines whether dissimilar types of politically connected firms (PCFs) are related to corporate tax avoidance. Additionally, it investigates whether this association is moderated by chief executive officer (CEO) shareholding and institutional ownership. Using the dataset of Malaysian public listed companies from 2002 till 2018, our findings suggest that PCFs are associated with higher corporate tax avoidance which is largely driven by older PCFs and government-linked companies (GLCs). Further analyses reveal that the association between older PCFs and GLCs and higher corporate tax avoidance is stronger in firms with higher CEO shareholding and institutional ownership.

Benchmarking Malaysian Government-Linked Companies’ Corporate Governance and Sustainable Development Goals Performance with Public Companies of Developed Countries

Purpose: This study examines the impact of Corporate Governance (CG) and Sustainable Development Goal (SDG) practices on the financial market and company performances of public sector companies in Malaysia, benchmarking against the public listed countries in United States, United Kingdom, Canada and Singapore. The benchmarking is done between a developing country against four developed countries. Design/Methodology/Approach: Panel data regression is adopted for methodology, and the research timeframe is 2017 to 2021. Eight-panel data models, which are stock return, volatility, investor sentiment, profitability, liquidity, solvency, financial efficiency and repayment capacity models are selected. Findings: The result shows that board responsibilities, remuneration, audit committee, risk management and internal control, engagement with stakeholders and conduct of general meetings are the CG variables to affect the financial market and company performance. SDG 4, 5, 8, 10, 11, 13, 16 and 17 are significant to the financial market and company performance. Originality/Value: The result of this study contributes to policymakers, regulators and practitioners in identifying the best CG and SDG practices that can help the Malaysian GLCs to gain better financial performance. The results assist the Malaysian government in understanding the gap between CG and SDG practices compared to developed countries and advocate the Malaysian companies to adopt better practices. Keywords: Corporate governance, sustainability, financial market, performance, GLC.