family ownership – Jurnal Pengurusan

Ownership Structures and Sustainability Reporting of Malaysian Listed Companies

asriwn — Sun, 31 Mar 2024 16:18:40 +0000

The study examines the quality of sustainability reporting (SR), the relationship between ownership structures (namely institutional ownership (IO), managerial ownership (MO), and family ownership (FO)) and SR, and the existence of a non-linear relationship between ownership structures and SR based on the inconsistent results of previous studies. The study collected secondary data from the annual and sustainability reports of 261 Malaysian public listed companies (PLCs) in 2018 and 2019 and analysed the data using content analysis. The results report a slight increment in the quality of SR in 2019, and using Ordinary Least Squares (OLS) regression, it is found that only IO has a positive and significant association with SR, which indicates that companies with major institutional shareholdings attain superior SR quality. Further exploration reveals a curvilinear relationship (inverse U-shape) between IO and SR quality, whereby the effect declines when IO reaches a certain threshold. As such, these findings shed light on the changes in investors’ motivation towards their Corporate Social Responsibility (CSR) commitment based on their company holdings, showing the delicate balance needed between oversight and the aligning of interests. This means that large institutional investors in a company should collaborate with management to advocate for policies and practices that support social and environmental objectives that are aligned with the company’s long-term view of value creation.

Board of Directors and Ownership Structure: A Study on Small and Medium Enterprises (SMEs) in Malaysia

sufizulkarnain01 — Sat, 08 Oct 2022 17:21:39 +0000

Small- and medium-sized enterprises (SMEs) do not gain sufficient economic returns despite their significant economic contributions. A possible cause of poor SME performance is weak corporate governance. However, the corporate governance of SMEs is rarely investigated. Ownership structure provides SMEs with a monitoring mechanism that enhances performance. This study examines the relationships between board characteristics (including size, composition boards, CEO duality, expertise, and ethnicity) and SME performance in Malaysia. This study also explores how such relationships can be moderated by monitoring ownership structure. Survey results on SMEs in Klang Valley and Selangor areas show that non-executive boards and CEO duality are significantly and positively related to firm performance. In comparison, management ownership is significantly and negatively related to performance. Board size, expertise, ethnicity, and family ownership are not significantly related to SME performance. Findings indicate that good corporate governance improves decision making and firm performance. Furthermore, agency theory can explain conflict of interest in SMEs and the importance of corporate governance in enhancing their performance.

Are Family Members Expropriated-Monitoring Shareholders? Non-Linear Evidence from the Saudi Arabia

syafiqahazieati — Sat, 08 Oct 2022 09:17:28 +0000

As family businesses grow worldwide, the significant role of family shareholders on firm value becomes questionable. This study seeks to address this issue and provides new evidence on the non-linearity of family ownership-firm value relationship, based on 375 firm-year observations of 75 public listed companies in Saudi Arabia over five consecutive years (2007-2011). Interestingly, we provided evidence that the behavior of the Saudi families is changeable between expropriation and monitoring during the life of the business depending on the percentage of family ownership. We found sufficient evidence that the turning point occurs at the 28% family ownership. This confirmed the expropriated-monitoring behavior of family shareholders in their businesses. These results were robust with respect to different family definitions and analyses. Our findings suggested that investors should not undervalue Saudi family firms due to family ownership per se. At a certain degree of ownership, the benefits of Saudi family monitoring actually exceed the costs. The results suggested that there may be a need to encourage policy makers in Saudi Arabia to impose the full disclosure of firms’ ownership information, including the percentage of ownership and the identity of owners.