KOTA KINABALU: Sabah government-linked companies (GLCs) and statutory bodies must move beyond merely complying with governance requirements and instead focus on delivering measurable performance, accountability and value for money, Finance Minister Datuk Seri Masidi Manjun said.
Masidi said board members should not serve as "rubber stamps" for management but as custodians of public trust responsible for safeguarding governance, accountability and the state's financial interests.
"A board is not merely there to approve papers and is not a rubber stamp for management.
"It is the guardian of trust, governance, accountability and public confidence," he said when opening the 2026 Course for Board Members of Sabah Statutory Bodies and State Government Companies at a hotel here.
He said board appointments carried legal, moral and fiduciary responsibilities, particularly as the organisations managed public funds and assets.
Masidi said governance failures often did not begin with major scandals but with small lapses that gradually became accepted practices.
"Governance failures usually do not begin with one major mistake. They begin when small matters are ignored — documents are not read, due diligence is not carried out, risks are underestimated, conflicts of interest are not declared, and the culture of simply approving proposals or avoiding questions becomes the norm.
"Such a culture must stop," he said.
Masidi also highlighted the need to strengthen the financial performance of state-owned entities, noting that contributions to the Sabah government had declined in recent years.
He said dividends and contributions from statutory bodies and state-owned companies rose from RM117.354 million in 2021 to RM156.313 million in 2022, but fell to RM141.80 million in 2025.
Loan repayments also dropped sharply from RM106.902 million in 2022 to RM29.424 million in 2025.
"These figures deserve serious attention.
"They show that every board decision — whether on investments, borrowings, procurement or risk management — has a direct impact on organisational performance and the state's fiscal position," he said.
Masidi said the state government wanted statutory bodies and GLCs to become high-performing organisations with sound financial discipline, strong governance and the ability to generate long-term value for Sabah.
He added that organisational performance should not be measured by the number of meetings, reports or programmes conducted, but by tangible outcomes.
"The real measure is impact. Has the organisation fulfilled its mandate? Have resources been managed efficiently? Has it delivered returns to the state? Is it prepared for changes in the economy, technology and global risks?" he said.
Masidi also urged boards to scrutinise spending to ensure every ringgit generated value for the organisation and taxpayers.
He said allowances, benefits, seminars, overseas visits and programmes should not continue simply because they had been conducted previously or budget allocations were available.
"Any allowance or benefit that lacks a clear policy basis, is unrelated to productivity and performance, or has no reasonable business justification should be reviewed.
"Good governance is not about spending more but ensuring every ringgit delivers maximum benefit to the organisation, the state and the people," he said.
Strengthen risk management, cybersecurity and data protection
He also called on boards to strengthen oversight of risk management, cybersecurity, data protection and Environmental, Social and Governance (ESG) practices while ensuring organisations maintain effective internal controls and whistleblower mechanisms.
Masidi said organisations that consistently underperform, have weak governance or lack clear strategic direction should be assessed objectively.
"We cannot continue to defend inefficiency on the grounds of tradition, relationships or habit," he said.
He urged board members to ask three questions before making any decision: whether it complies with the law, whether it upholds integrity and ethics, and whether it delivers long-term benefits to the organisation, the state and the people.
"If the answer is yes, then do what is right, even if the decision is difficult or unpopular," he said.
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