corporate governance – Jurnal Pengurusan

Corporate Governance, Leverage, and Stock Returns of Non-Financial Listed Firms in the ASEAN Region: The Moderating Role of Firm Growth

asriwn — Tue, 20 May 2025 04:13:08 +0000

A well-structured board, with diversity, independence, and strong audit committee supervision, can enhance shareholder value by improving monitoring, decision-making, and investor trust, ultimately leading to higher returns However, empirical research has revealed a more subtle perspective, with various relationships that can be positive, inconclusive, or negative. highlighted the importance of further studies on the moderating factors that help explain these diverse findings. This study examines the moderating role of firm growth on the effects of corporate governance mechanisms and leverage on the stock returns of non-financial listed firms in the ASEAN region. Data were obtained from six countries in the ASEAN region comprising 412 firms covering to 2012-2022 from the LSGE-Eikon database. This study reveals a positive relationship between board independence, gender diversity, and robust audit committees and returns, emphasising the importance of strong governance in aligning interests and reducing agency costs. It also highlights the role of firm growth in influencing governance elements, and emphasizes the link between strategic leverage and growth expectations. Establishing robust independent audit committees and sharing financial information consistently is recommended to promote openness and confidence. This study implies that businesses with strong corporate governance, particularly those with higher price-to-book ratios, experience better supervision and decision making.

Enterprise Risk Management Quality and Financial Distress Risk: A Real Earnings Perspective

asriwn — Mon, 05 May 2025 01:02:17 +0000

Motivated by the recent decline in performance and liquidity crisis of African firms orchestrated by the COVID-19 pandemic, this research examines the impact of real earnings management (REM) on financial distress risk (FDRisk), and whether enterprise risk management quality (ERMQ) moderates the effect. The study provides new insights on whether firms with robust enterprise risk management (ERM) systems performs better than their counterparts with no ERM systems. This research examines the impact of real earnings management (REM) on FDRisk, and whether ERMQ moderates the effect. The study employs the least square dummy (LSDV) variable two-way fixed effect estimator to analyse panel data from 186 non-financial firms operating in nine (9) sub-Saharan African countries. The findings indicate that REM worsens FDRisk. The results also suggest that firms that implement high-quality enterprise risk management attenuate the negative effect of REM on FDRisk. We further find that “board governance” and “corporate disclosure” quality are likely channels through which REM exacerbates FDRisk. This study offers an empirical explanation of how REM worsens FDRisk and the alleviating role of ERMQ, as corporations in weaker corporate governance (CG) regions seek strategies to discourage REM and improve firms’ financial health.

Corporate Governance as a Catalyst for Sustainability: Insights from Malaysian Public Listed Companies

asriwn — Wed, 06 Nov 2024 03:21:25 +0000

Corporate sustainability remains a prominent global concern, with stakeholders increasingly holding businesses accountable for their actions. Corporate governance (CG), facilitated by an effective board and risk management committee, can exert an impact on corporate sustainability performance (CSP). The mixed findings of prior research, on factors influencing CSP, serve to motivate this study. Additionally, the influence of sustainability committees (SC) in the CG-CSP relationship has not been examined before. This study thus represents one of the earliest investigations that elucidate the impact of SC on the relationship. The study sample comprised 762 listed companies in Malaysia, spanning 2020 to 2022. Using content analysis on company annual reports, the results established the positive and significant influence of CG on CSP as consistent with the stakeholder theory. Moreover, the results demonstratd that SC was not able to strengthen the role of CG in its relationship with CSP. These empirical findings offer valuable guides for regulators, companies, and stakeholders, that emphasise the influence of CG and SC on CSP.

Characteristics of Board and Shariah Board on Risk-Taking and Performance: Evidence from Takaful Operators in Malaysia

asriwn — Fri, 20 Sep 2024 01:34:46 +0000

This study examines how board of directors (BOD) and Shariah board (SB) characteristics influence risk-taking and performance in Malaysian Takaful operators (TOs). These operators face unique challenges when balancing financial growth with strict adherence to Shariah principles. The study analyse data from 15 TOs from 2012 to 2021, resulting in a total of 124 firm-years of observations using panel data regression techniques. The key findings are a higher proportion of women on BOD leads to less risk-taking, while larger SB with more PhD members encourage it. However, the impact on performance is mixed. More women on BOD might reduce returns on assets, while frequent BOD meetings and a highly qualified SB might lower return on equity. This research offers valuable insights, where investors should consider the risk-return trade-off when evaluating TOs based on BOD and SB composition while managers need to balance risk management with Shariah compliance by building diverse BOD and optimising SB structure. Industry regulators should promote sound governance practices and collaboration between BOD and SB. Overall, the study contributes to the corporate and Shariah governance literature, shedding light on the complex interplay between BOD composition, SB expertise, risk-taking and performance in a complex industry.

Board Characteristics and Financial Performance: Evidence from Bursa Malaysia Financial Times Stock Exchange (FTSE) Top 100 Index Firms

asriwn — Thu, 15 Aug 2024 02:28:56 +0000

Research on the relationship between corporate governance and firm financial performance in Malaysia is inconclusive, and only covers the period before the implementation of Malaysian Code on Corporate Governance (MCCG) 2017. Therefore, this study examines the relationship between corporate governance and the financial performance of 80 non-financial firms listed on the Financial Times Stock Exchange (FTSE)Bursa Malaysia Top 100 Index between the years of 2018 and 2020. The descriptive statistics reveal that on average, the 23% composition of female directors on the board is still below the recommended MCCG 2017 and 2021 threshold of 30%. The small percentage of politically-connected directors (19%) and military-experienced directors (5%) reported in this study can be viewed favourably in line with the recent MCCG 2021 recommendation that the appointment of the directors should be apolitical or politically neutral without having any executive powers in politics. In addition, the multiple regression results indicate that board size and board meeting frequency are negatively related to firm financial performance. Female directors show a positive and significant relationship with firm financial performance. However, the effects of board independence, board alumni, board financial expertise, politically-connected directors, and military-experienced directors on firm financial performance, are insignificant. This study is beneficial to academicians, policymaker/regulators, and firm managers, in considering the contributions of corporate governance mechanisms to large listed companies’ financial performance, particularly in an emerging market.

Government Board of Director: The influence of Director Identifications on Human Capital Acquisition and Board Oversight Roles

asriwn — Sun, 08 Oct 2023 23:02:08 +0000

Identification is a sense of belonging to particular social groups with similar characteristics or similarly perceived role identities. The strength of an individual’s identification is context-dependent and can influence an individual’s behavior according to certain expectations. Despite abundant research on board oversight roles, little is known about why board members behave in certain ways due to a lack of literature from a socio-behavioral perspective. This paper explores how identification with social groups and role identities among the government board of directors (GBOD) influence their human capital and board roles. The results, derived from semi-structured interviews of twelve government officials who were appointed to the boards of Malaysian State-Owned Enterprises (SOEs) as government representatives, indicate that different identifications, such as the role of government board of director, corporate director, or both, and identification with the SOE could lead to different perceptions of the importance of human capital and influence their contributions in boardrooms. This study provides empirical evidence for the corporate governance literature from a socio-behavioral perspective and helps government agencies and regulators understand the reasons behind GBOD behavior. Selecting board members based on their human capital may be inadequate, and board members may need training to help them identify their roles and responsibilities as government representatives on the board.

Environmental Performance: Does Corporate Governance Matter?

khairul23 — Sat, 15 Oct 2022 10:54:34 +0000

Corporate environmental management and performance have become increasingly significant for companies in recent years, as they should operate in line with societal values and norms. Top management of companies, which include their board members, have an important role to play to address environmental issues, which include compliance with environmental laws and regulations. However, despite the growing number of environmental problems, stakeholder pressures and media attentions, there are relatively few studies that consider the role of corporate governance mechanisms in influencing the corporate environmental performance. This study investigates this phenomenon built upon the stakeholder theory. The study employs a matched pairs’ design method to select sample of this study; compliant and noncompliant groups of companies listed on Bursa Malaysia for the year of 2013. Data for environmental performance (EP) information were obtained from the Malaysia Department of the Environment (DOE). Data for corporate governance were collected from annual reports of sample companies to form corporate governance index. Results show that corporate governance mechanism is positively associated with the environmental performance of companies in Malaysia. Results suggest that the existence of good corporate governance would lead to higher companies’ compliance with environmental regulations that positively affects environmental performance. Additional analysis, which uses an alternative measurement for corporate governance and environmental performance measures, also confirm this finding. The results of this study highlight the importance of corporate governance mechanism in the formulation of strategic direction and operational implementation especially in the area of environmental management to meet regulatory standards and stakeholders’ expectation.

Hubungan Saling Pengaruh Lembaga Pengarah dan Prestasi Firma: Perspektif Rangkaian Sosial

Faris A181711 — Wed, 12 Oct 2022 01:41:07 +0000

Interlocking or shared directorship is among important issues in corporate governance. According to resource dependence theory, interlocking directorship can become resources that can improve firm performance. This explanation is in line with business environment in Malaysia that can be categorized as networked economy. On the other hand, interlocking directorships can also be related to social cronyism that can have negative impacts on firms. As such, an investigation should be made to examine these conflicting arguments on interlocking directorships. In particular, different than prior research, this study aims at examining the influence of interlocking directorship patterns and the impact of interlocking directorship’s concentration on firm performance. Using 240 firm-years data of technology firms listed on the Main and ACE Markets, the results of tests reveal that interlocking non-executive directorships and interlocking directorship’s concentration did not influence firm performance. Nonetheless, the result also suggests that interlocking executive directorships have negative impact on performance. This result proves that executive directors who are also directors of other firms are in the position that may increase the risk of conflict of interests. In line with social capital explanation, the findings support prior literature on cronyism in directors’ networking.

The Role of Ethics in Corporate Governance

Amirulilul — Tue, 11 Oct 2022 09:02:52 +0000

The purpose of this paper is to explore the role of ethics in corporate governance. The research is situated within an interpretive approach. The interview technique was employed to explore the issue. Interviews were conducted with 13 experts who were involved in the reform of Malaysian corporate governance. The experts were selected based on their expertise and experience. Three themes emerged in respect of the main role of ethics in corporate governance: corporate governance is a code of ethics, corporate governance is inclusive of ethics, and ethics is an affiliate of corporate governance. The research has contributed in enhancing the understanding of corporate governance by shifting the focus from a structural perspective to a moral perspective and manages to highlight the contradictions that lie within the understanding of corporate governance in moral perspective.

An Empirical Study of Auditors Switching, Corporate Governance and Financial Performances of Malaysian Public Listed Companies (PLCs)

Amirulilul — Tue, 11 Oct 2022 06:53:16 +0000

In the past years, regulators and the business communities had expressed worries about the alarming rate at which firms or corporations collapse due to the mismanagement and manipulation of resources as seen in the cases of Enron, WorldCom in the United States of America; and to be specific in Malaysia, the cases of Megan Media Holdings Berhad and Transmile Group. Auditor switching is evident and the disorder of auditor switching often takes place in Malaysia; however, as time goes by, it is decreasing. Thus, this paper seeks to empirically examine the effect of auditor switching and corporate governance on financial performance of Malaysian PLCs. Secondary data on a total number of 100 PLCs from years 2009 to 2013 are used. The results reveal that the effect of auditor switching on performance does not vary with duality role and the board size. However, the independent director does not cause a good firm performance. Nonetheless, auditors do not have a direct effect on financial performance since they are not directly involved with the management of the firms which negates the results of previous study. Therefore, this paper has vital impact in that regulators and the public need to be educated through awareness campaigns to emphasize on the auditors’ roles as agents in understanding the impact of the association between corporate governance and financial performance. Furthermore, auditor switching should embrace not only rotation of audit partners, but rotation of audit firms as well in view that this will help in infusing discipline from the top to the bottom of the audit firms and the companies.