KOTA KINABALU: Sabah Law Society (SLS) commends the State Government and the Chief Minister for revamping the Corporate Policy and Governance Monitoring Committee (CPGMC) for the purposes of strengthening and enhancing the oversight and corporate governance of all State Statutory Bodies [BBNs] and Government Linked Companies [GLCs].
This is certainly a step in the right direction for ensuring transparency and accountability of the BBNs and GLCs of the State, said its President, Roger Chin, in a statement Monday.
He said SLS recognises that both BBNs and GLCs as State-owned enterprises are an incredibly important element in the economy.
Therefore, he said, high standards of corporate governance are critical to ensure financial stability and sustain economic growth.
“In this respect, the SLS would suggest for the State Government to ensure that the CPGMC adopt some of the recommendations made by the Organisation for Economic Co-Operation and Development (OECD) on “Ownership and Governance of State-Owned Enterprises”.
“Specifically, the key pillars of organizing the state enterprise ownership function, transparency and disclosure practices, safeguarding a level playing field between BBNs / GLCs and the private sector, professionalizing the board of directors and management to enhance risk management.
“In this respect, there should also be financial performance targets for some aspects of the State-owned entities operations. State-owned enterprises are ultimately owned by the general public and the government agencies who exercise the ownership rights are answerable to the general public,” he said.
By having a thorough and robust approach to governance of BBNs and GLCs, he said, the State Government will be able to unlock and realise the potential value of a State-owned enterprise and enhance the return on investment so that there is a much greater contribution to the State economy.
“More so needed, during these challenging times of the Covid-19 pandemic,” he said.
In addition, he said the CPGMC can also encourage Environmental, Social and Governance (ESG) standards to ensure global expectations are met with regards to sustainable development without compromising the growth opportunities.
“Moving forward in the long term, the State will benefit from embracing the need to be ESG compliant as investors are increasingly focusing their attention on sustainable investing and climate risks,” he added.
He said SLS stands ready to assist to State Government in any of the above recommendations of the OECD.
It may be necessary to legislate to provide for the legal and regulatory framework required by the creation of a central agency to supervise, coordinate and monitor the BBNs and GLCs, he said, adding the Statutory Bodies (Supplementary Provisions) Enactment 1997 can be re-visited and amended to provide greater oversight authority for the BBNs and GLCs.