GLCs and Network Governance

With regards to this matter, the implementation of NEP (1971), the implementation of ICA (1975) and the subsequent formation of GLCs were considered as a direct result of the uncertainty of the bumiputra business agenda and unique social environment in Malaysia. This phenomenon triggered the network governance framework in Malaysia. The formation of GLCs and other special programme under its stable, fine tune and stabilize this environment. It intensifies coordination and focus between government and firms that shoulders the responsibilities of seeing the noble objectives of NEP and GLCs materialized.  All of this distinctiveness could be observed in the implementation of NEP (1971), ICA (1975) and GLCs in the early 80’s in Malaysia.

Specifically, the network governance characteristics could be obviously noticed in the appointment of senior government officers (SGO) and politicians (POL) as directors. Many of them were appointed as directors in GLCs and even in NGLCs. These characteristics were largely influenced by their close linked to the government and lawmakers. 

 However, it is not known whether their presence as boards’ member would contribute anything towards firm performance as there were only few studies that explicitly relate POL to firm performance in Malaysia. As for SGO, there were no studies  yet except those conducted on Singapore’s GLCs. Singapore is a handy comparator as it was once part of Malaysia before the two countries split in 1965