On Political Appointments on Khazanah Board
Friday, August 03, 2018
Whilst the new members of the Khazanah Board are men of calibre, membership of the Board should not comprise politicians or Cabinet members.

Firstly, each director has to discharge their duties in the interest of the company and its stakeholders such as shareholders, employees, creditors and being a sovereign wealth fund, the people. Having our Prime Minister and Cabinet Ministers sitting on the Board would unnecessarily expose them to liabilities which are best shouldered by corporate leaders.

Secondly, these sovereign wealth funds should be run like any other corporation. This means political considerations should be excluded from the Boardroom. In the event that there are specific political purpose for the fund, it should be made clear as part of its mission statement for its management to know and follow, and being accountable to the public.

By having professionals in the board, the government can bring the board to task in the event of mismanagement. We have seen how 1MDB became a massive national financial scandal due to politicians' interference in the sovereign wealth fund, following poor check-and-balance. 

This is unlike statutory boards, some of which are chaired by Ministers, as these agencies are directly answerable to Parliament. Matured democracies around the world shun the practice of having politicians manage public-funded investments. Malaysia must not see another failure or bail--out caused by political interference.

This would also be consistent with institutional reforms which the new government advocates.

Finally, we recognise that the members of the Khazanah Board who recently resigned had substantially grown the wealth of the nation.

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