The Performance of Audit Committee Function in Malaysian Government Link Companies

Abstract

Government-Linked Companies (GLC's) are defined as companies that have a primary commercial objective and in which the Malaysian Government has a controlling stake. Controlling stake refers to the Government's ability (not just percentage ownership) to appoint BOD members, senior management, make major decisions (e.g. contract awards, strategy, restructuring and financing, acquisitions and divestments etc.). GLCs represent a substantial portion of the economic structure of Malaysia to account for approximately RM260 billion in market capitalization (the market capitalization approximately 36% of Bursa Malaysia and 54% respectively of the benchmark Kuala Lumpur Composite Index). In addition, GLCs account for an approximated 5% of the national work force.