CORPORATE GOVERNANCE: THE GATEWAY TO A ROBUST CORPORATE FINANCIAL PERFORMANCE IN MALAYSIA
DOI:
https://doi.org/10.14738/abr.87.8553Keywords:
corporate governance, corporate financial performance, ROA, ROE and Tobin’s QAbstract
In recent years, with corporate scandals and the global financial crisis, the emerging concept of corporate governance has received increasing attention in the corporate world in these days. It is seen as a moral obligation and includes supporting the consistency of the law and showing ethical guidance. Corporate governance is seen as an important tool for the financial performance of companies, and investor investment decisions have become a more serious topic, so the relationship between corporate governance tools and measurement of financial performance has attracted researchers' interest in the past decade mainly in developed and developing cities. In this study, we attempted to examine the impact of corporate governance on corporate financial performance in Kuala Lumpur using a sample of 215 companies on KLSE. Like previous research, firm, age, firm size, board size, CEO duality, board composition, board committees is the independent variables and their influence is to measure the financial ROA, ROE and Tobin's q , all kinds of test is used to investigate the relationship such as descriptive analysis, Pearson moment related test and regression using first data over a period of time.
References
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ABIDIN, Z., KAMAL, N., & JUSOFF, K. (2009). Board Structure and Corporate Performance in Malaysia. International Journal Of Economics And Finance, 1(1). doi: 10.5539/ijef.v1n1p150
ALLAM, B. (2018). The Impact of Board Characteristics and Ownership Identity on Agency Costs and Firm Performance: UK Evidence. Corporate Governance: The International Journal Of Business In Society, 18(6), 1147-1176. doi: 10.1108/cg-09-2016-0184
AL-MATARI (2014). Asian Journal of Finance & Accounting, Vol. 6, No. 1
BAIRATHI, V. (2009). Corporate governance: A suggestive code. International Research Journal, 11(6), 753-754.
BAUER, GUENSTER AND OTTEN. (2004). 'Empirical Evidence on Corporate Governance in Europe: The Effect on Stock Returns, Firm Value and Performance', in Journal of Asset Management, Vol. 5, No. 2, pp. 91-104.
BAYDOUN, N, MAGUIRE, W, RYAN, N & WILLETT, R, (2013) Corporate governance in five Arabian Gulf countries, Managerial Auditing Journal, vol. 28, no. 1, pp. 7-22.
BHAGAT, SANJAI AND BERNARD BLACK. (2002). The non-correlation between board independence and long term firm performance, Journal of Corporation Law 27, 231-274
CHRISTENSEN, J., KENT, P., & STEWART, J. (2010). Corporate Governance and Company Performance in Australia. Australian Accounting Review, 20(4), 372-386. doi: 10.1111/j.1835-2561.2010.00108.x
CRETU, R. F. (2012). Corporate Governance and Corporate Diversification Srategies, Revista de Management Comparat International, 13, 621-633.
DEMSETZ, H., & LEHN, K, (1985), The Structure of Corporate Ownership: Causes and Consequences. The Journal of Political Economy, 93(6), 1155-1177.
FÜLÖP, M. (2014). Why do we need effective corporate governance? International Advances in Economic Research, 20, 227-228.
FUNG, B. (2014). The Demand and Need for Transparency and Disclosure in Corporate Governance, Universal Journal of Management 2(2): 72-80
HABBASH, M., & BAJAHER, M. S. (2014). An empirical analysis of the impact of board structure on the performance of large Saudi firms. The Business Review, Cambridge, 22(1), 152-158.
HANIFFA, R & HUDAIB, M. (2006), Corporate Governance Practices and Firm Performance: Evidence from Top 100 Public Listed Companies in Malaysia, Journal of Business Finance & Accounting Volume 33, Issue 7-8, 1034–1062
JACKLING AND JOHL. (2009). Board Structure and Firm Performance: Evidence from India's Top Companies, Corporate Governance: An International Review, 17 (4), 492–509
JENSEN, M. C., & MECKLING, W. H. (1983). Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure. Journal of Financial Economics, 3(4), 305-360.
JOHNSON AND GREENING. (1999). The Effects of Corporate Governance And Institutional Ownership Types On Corporate Social Performance, Academy of Management Journal Vol 42 No:5 564-576
KIEL, G., & NICHOLSON, G. (2003). Board Composition and Corporate Performance: How the Australian experience informs contrasting theories of corporate governance. Corporate Governance: An International Review, 11(3), 189–205.
KOUFOPOULOS, D., LAGOUDIS I., THEOTOKAS, I. AND SYRIOPOULOS, T. (2010), Corporate Governance and Board Practices by Greek Shipping Management Companies, Corporate Governance: The International Journal of Business in Society, 10(3): 261-278.
LIPTON, M., & LORSCH, J. (1992). A Modest Proposal for Improved Corporate Governance. The Business Lawyer, 48(1), 59-77.
MASHAYEKHI, B., & BAZAZ, M. S. (2008). Corporate Governance and Firm Performance in Iran, Journal of Contemporary Accounting & Economics, 4(2), 156–172.
MEHRAN, H. (1995). Executive Compensation Structure, Ownership, and Firm Performance.Journal of Financial Economics, 38(2), 163-184. Michael S. Weisbach, 1988, Outside Directors And Ceo Turnover, Journal of Financial Economics, 20, 431-460
SIMON A.A & ENOGHAYINAGBON M.A PH.D. (2014). Corporate Governance And Financial Performance of Selected Quoted Companies in Nigeria European Journal of Business and Management ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.6, No.9
TUFANO, P. (1996). Who Manages Risk? An Empirical Examination of Risk Management Practices in the Gold Mining Industry, Journal of finance, 51 (4), 1097-1137
YERMACK, D. (1996). Higher Market Valuation of Companies with a small Board of Directors. Journal of Financial Economics, 40, 185-211
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Published
2020-07-13
How to Cite
Aseh, K., Kenny, K., & Pathmanathan, R. (2020). CORPORATE GOVERNANCE: THE GATEWAY TO A ROBUST CORPORATE FINANCIAL PERFORMANCE IN MALAYSIA. Archives of Business Research, 8(7), 91–98. https://doi.org/10.14738/abr.87.8553
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