KUALA LUMPUR (July 24): Tan Sri Abdul Wahid Omar, former chairman of Bursa Malaysia Bhd (KL:BURSA), is calling on Corporate Malaysia to go beyond mere regulatory compliance by voluntarily adopting a decent living wage as part of a more holistic embrace of the "Social" component within Environmental, Social, and Governance (ESG) standards.
Wahid, who currently serves as the senior independent director at IOI Corp Bhd (KL:IOICORP), stressed that employers, particularly listed companies, must do more to ensure fair treatment of workers. This extends beyond workplace safety to include equitable pay and overall well-being.
He highlighted that as of June 2024, the median wage for Malaysia's 6.7 million formal sector workers was RM2,745 per month. In states like Kelantan, this figure is even lower, at RM1,700.
"It’s almost unthinkable that half of our workers in the formal sector earn RM2,745 and below," Wahid said during a panel discussion at the Asean Corporate Governance Conference 2025. "For many of us in large companies, we don’t see these numbers. But they are real."
"So, where does this RM2,745 come from? It must come from the many other companies that are so-called below the radar, the SMEs and so on. And even some public-listed companies that we have here. So, my encouragement to all the employers would be to be a bit more generous to your employees and pay them decent wages so that they can live decently."
The panel session, titled "Board Leadership in a Changing Governance Landscape," also featured John Lim, immediate past chairman of IREIT Global Singapore; Angela Simatupang, director of the global board at RSM Indonesia; and Atty Benedicta Du-Baladad, chairperson of the Institute of Corporate Directors Philippines.
Wahid, who previously served as Minister in the Prime Minister's Department in charge of the Economic Planning Unit (2013–2016), noted that the current government has already implemented a living wage policy for all permanent Malaysian employees in government-linked investment companies (GLICs). The benchmark living wage for GLICs was set at approximately RM3,100 per month, almost double the RM1,700 monthly minimum wage implemented since Feb 1, 2025.
GLICs reported to have fulfilled and committed to the living wage cause include Khazanah Nasional Bhd, Permodalan Nasional Bhd (PNB), the Employees Provident Fund (EPF), Kumpulan Wang Persaraan (Diperbadankan) (KWAP), Lembaga Tabung Angkatan Tentera (LTAT), and Lembaga Tabung Haji.
"There’s no compulsion [on other employers], but I think as business owners, it’s incumbent upon you to actually embrace the real spirit and intention of the social aspects of ESG,” Wahid urged.
He further pointed out that wages in Malaysia constitute only 33.1% of gross domestic product (GDP), significantly lower than developed economies where labor's share is around 50%. Under the Madani Economy framework, the government aims to raise the compensation of employees to 40% of GDP by 2025 and 45% by 2033.
"So we have a long way to go from 33.1% to 45%," Wahid concluded. "To reach that, it has to start with every employer looking at their own workforce and asking: are we paying our staff decently?”
Source: https://theedgemalaysia.com/node/763975