The state of Penang, Malaysia has its own state legislature and executive, but these have very limited powers in comparison with those of the Malaysian federal authorities.
Penang is one of only four states in Malaysia not to have a hereditary Malay Ruler or Sultan, being a former British settlement, the other three being Malacca, also a British settlement, whose sultanate was ended by the Portuguese conquest in 1511, and the Borneo states of Sabah and Sarawak.
The head of the state executive is a Yang di-Pertua Negeri (Governor) appointed by the Yang di-Pertuan Agong (King of Malaysia). The present Governor is Tun Dato' Seri Haji Abdul Rahman bin Haji Abbas. In practice the Governor is a figurehead, and he acts upon the advice of the state Executive Council, which is appointed from the majority party in the Legislative Assembly.
The Chief Minister of Penang is Mr. Lim Guan Eng from the Democratic Action Party (DAP). Following the 12th general election of 8 March 2008, the coalition of DAP and Parti Keadilan Rakyat (PKR) formed the state government, with the chief ministership going to the former that emerged as the single largest party in the state legislature.
Penang is the only state in Malaysia in which its chief ministership has been continuously held by a non-Malay ethnic Chinese since independence, reflecting the state's ethnic majority.
Penang has two deputy chief ministers: Dato' Mohd Rashid bin Hasnon from PKR is Deputy Chief Minister I and Dr. P. Ramasamy of DAP is Deputy Chief Minister II. The latter made history by becoming the first ethnic Tamil to hold the deputy chief minister post.
Ever since coming into power, Chief Minister Lim has been espousing a clean and efficient government based on CAT (Competency, Accountability, and Transparency).
The Chief Minister heads the State Executive Council, the highest administrative body in the state, which answers to the Legislative Assembly. The state Secretariat and other state or federal government departments assist the Executive Council in the state's administration. Most government offices are housed in the 65-storey tower block of the Tun Abdul Razak Complex (KOMTAR) in the heart of George Town.
When Parti Gerakan Rakyat Malaysia, a coalition member of the Barisan Nasional (BN), headed the then state government, there were occasional calls by United Malays National Organisation (UMNO), its other coalition member, to rotate the position of chief minister among the BN component parties. However, this has consistently been rejected by the BN leadership. Such demand reached new heights in 2006 due to the alleged marginalisation of the Malay populace. Interestingly, one of the more vocal proponents is Khairy Jamaluddin, the son-in-law of former Malaysian Prime Minister, Tun Abdullah Ahmad Badawi. It is to be noted that during Tun Dr. Mahathir bin Mohamad's tenure of prime ministership, he refuted claims of marginalisation by alluding to the Malay-governed state of Kelantan. In fact, Malays in Penang are only second to their counterparts in the Klang Valley. They fare better than those from other states such as Kedah, Perlis and Terengganu.
There are two local authorities in Penang, the City Council of Penang Island (Majlis Bandaraya Pulau Pinang)  and the Municipal Council of Province Wellesley (Majlis Perbandaran Seberang Perai). Local councillors have been appointed by the state government since local elections were abolished in Malaysia in the 1960s. The city council is made up of a mayor, a secretary and 24 councillors. The municipal councils is made up of a president, a municipal secretary and 24 councillors. Both mayor and president is appointed by the State Government for two-year terms of office while the councillors are appointed for one-year terms of office. The state is divided into 5 administrative divisions:Penang Island:
North-East District (Daerah Timur Laut)
South-West District (Daerah Barat Daya)
Province Wellesley (Seberang Perai):
Central Province Wellesley (Seberang Perai Tengah)
Northern Province Wellesley (Seberang Perai Utara)
Southern Province Wellesley (Seberang Perai Selatan)
Each district is headed by a district officer.
The following table shows the succession of the heads of governments of Penang from its founding years to the present day.
The unicameral state legislature, whose members are called state assemblymen, convenes at the neoclassical state Legislative Assembly (Dewan Undangan Negeri) building at Light Street. It has 40 seats, 19 of which are held by the Democratic Action Party, 11 by Barisan Nasional, nine by Parti Keadilan Rakyat and one by PAS since the 2008 general elections. It was a sharp reversal from the 38 seats held by BN in the 2004 elections and only the second time since Independence that the state fell into non-BN control, the last being in 1969.
In the Malaysian Parliament, Penang is represented by 13 elected Members of Parliament in the Dewan Rakyat (House of Representatives), serving a five-year term, and has two senators in the Dewan Negara (Senate), both appointed by the state Legislative Assembly to serve a three-year term.
The court system in the Federation had its origin in the 1807 charter known as the First Charter of Justice whereby the British East India Company obtained from the British Crown the right to establish a permanent Court of Judicature in the settlement of Penang. This was followed by the appointment of the first Supreme Court judge designated as the 'Recorder' and Sir Edmond Stanley assumed office as the First Recorder of the Supreme Court of Penang in 1808. At the same time, Sir Stamford Raffles, the founder of Singapore, was the first registrar of the Supreme Court. The designation 'Judge' was subsequently substituted for that of 'Recorder'. The Supreme Court of Penang was first housed at Fort Cornwallis and was opened on 31 May 1808.
Today, the judicial power is almost completely vested in the federal court system. The Supreme Court Building in Light Street and Farquhar Street houses the Penang registry of the High Court in Malaya as well as the George Town Sessions Court and Magistrates courts. The Penang Prison is located at Gaol Road.