Ansell Lanka officially certified Great Place to Work – The Island

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Continued from last Saturday

Reforms to the composition of the board. National Development – ​​focusing on national development goals such as job creation and economic multipliers. Support government policy formation and adopt a long-term vision to catalyze social progress in Malaysia to achieve high social impact in communities.

Good governance – took a holistic and multi-pronged approach to measuring how public institutions conduct and manage public resources.

2. National support

A degree of national consensus is vital with all relevant stakeholder groups involved and driven by political will. The reform process was carried out over 10 years from 2005 where Khazanah reform started under the 4th Prime Minister of Malaysia, GLC Transformation Program (GLCT) under the 5th Prime Minister and continued under the 6th Prime Minister.

3. Communications, Transparency, Public Accountability

Transparency and consistent periodic reporting are essential to the success of the program. The KPIs were publicly announced with regular public updates, with the internal KPIs being identical to the external KPIs. This was followed by consistent and relevant stakeholder engagement across multiple categories.

4. Active, competent and authorized holding company

Khazanah has been reorganized into an active and strategic SDF (Sovereign Development Fund). Khazanah was also responsible for proposing a global program for other funds from 2005 to 2015. This program was known as the GLC Transformation Program (GLCT) with Khazanah acting as the secretariat.

5. A robust program management approach over 10 to 15 years

The GLCT program has been implemented for 10 years with a carefully designed implementation structure. It consisted of 22,981 man-days of program management and 29 meetings were chaired by the Prime Minister to review progress over the 10-year period. It is imperative to stay the course because the price to pay to achieve this and the price to pay for not doing so is high. However, care must be taken to ensure that it is done correctly.

6. Talents and Leadership

Good leadership is essential. Therefore, the general manager. the board and senior management must be selected according to specific criteria to appoint people based on their ability and knowledge to fulfill their role. This should also be followed by a rigorous selection process.

7. Transformative Acupuncture

Targeting of 10 critical areas for improvement of corporate restructuring in key companies. Critical areas included board governance, CSR, procurement, leadership development, performance-based compensation, regulatory, operational improvement and finance.

8. Liability

This included key performance indicators, performance-based compensation, senior managers limited to 3-year performance-based contracts, and a robust appointment process, emulating a carrot and stick approach.

9. Establish key sectors in terms of policy mix

It is important to identify critical sectors such as electricity, telecommunications, banking, aviation, infrastructure, etc. which play a vital role in the economy. Plan sector strategy, regulation, pricing, social policy, etc. for selected sectors instead of reforming all sectors will also divert resources to effective and efficient use.

10. Use the levers of ownership, funding and controls

The sorting between mainly commercial enterprises and mainly social enterprises is also relevant. Understanding which particular category businesses fall into will provide clarity on how to manage those businesses, such as whether to list or delist them, conduct partial or full asset sales, and understand capital structure controls. debt discipline and required external audits.

How has it contributed to development goals?

Khazanah’s primary funding comes from equity. It uses debt financing and proceeds from divestment activities to fund its investing activities. Khazanah’s ultimate holding body and therefore sole shareholder is the Ministry of Finance (MoF).

In terms of contribution, between 2004 and 2021, Khazanah has paid RM15.6 billion in dividends to the government (or MoF) for an average of RM1.3 billion per year over the past five years. Dividends of RM2 billion each had been declared in 2020 and 2021.

Investment income contributed 16.3% of total government revenue in 2021, of which Khazanah contributed about 6% of investment income through its dividends. Although the contribution to government revenue through dividends remains marginal compared to other sources of tax revenue, Khazanah has continued to deliver societal value and impact through various other initiatives.

During the pandemic, RM20 million was donated by Khazanah as COVID-19 relief to the government. Therefore, Khazanah acts as a buffer against future pandemics and can assist the government in its relief measures.

One of Khazanah’s foundations – Yayasan Hasanah – has directly and indirectly helped 1.5 million people through Covid-19 relief efforts and various other programs, with an allocation of RM554 million in 2021.

The Khazanah Research Institute was established to undertake analysis and research on the nation’s pressing issues and, based on this research, provide policy recommendations to improve the welfare of Malaysians. A total of 30 publications were published in 2021.

Khazanah also works on development projects for the improvement of the Malaysian economy. This includes Dana Impak, which is a newly created project with an allocation of RM6 billion over 5 years. This is done to increase Malaysia’s economic competitiveness and build national resilience. This focuses on 6 areas namely; digital society and technology hub, health and quality education for all, decent work and social mobility, food and energy security, building climate resilience and competing in global markets.

The full dossier can be viewed at: Holding Company for SOEs: Learnings for Sri Lanka

This article was developed as part of the Strategic Insight Series by the Economic Intelligence Unit (EIU) of the Ceylon Chamber of Commerce (CCC) in conjunction with the Colombo Stock Exchange (CSE). The Strategic Insight Series is a series of dissertations that focus on key contemporary topics that matter to the private sector.

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