Title: Board of directors and performance of Malaysian companies

Authors: Nazli A. Mohd Ghazali

Addresses: Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, P.O. Box 10, 50728, Kuala Lumpur, Malaysia

Abstract: The objective of this paper is to examine the influence of board of directors on market performance of large Malaysian listed companies. Using data from corporate annual reports for the financial year 2010, the regression results show that the proportion of independent directors on the board and the proportion of government ownership have a positive and significant impact, while role duality has a marginally significant impact on market capitalisation. These findings suggest that the market values companies which have a higher proportion of independent directors and government ownership. In contrast, the marginally significant finding on role duality implies that in Malaysia where businesses are predominantly built from family businesses, separating the chairman and CEO roles may not enhance market performance. The findings of this study show that there is no one-size-fits-all approach to corporate governance instead it should be applied taking into consideration a company's nuances and needs.

Keywords: board of directors; board size; independent directors; role duality; ownership concentration; corporate performance; Malaysia; firm performance; annual reports; government ownership; market performance; corporate governance.

DOI: 10.1504/IJMFA.2014.064517

International Journal of Managerial and Financial Accounting, 2014 Vol.6 No.2, pp.117 - 132

Received: 17 Jul 2014
Accepted: 20 Jul 2014
Published online: 23 Oct 2014 *

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