Corporate Governance: The Linkage to Firm Performance in Malaysia

2020 ◽  
Vol 8 (11) ◽  
pp. 80-86
Author(s):  
Khairi Aseh ◽  
P. Ravindran Pathmanathan
Keyword(s):  
Corporate Governance ◽  
Global Financial Crisis ◽  
Positive Impact ◽  
Stock Exchange ◽  
Major Effect ◽  
Value Assessment ◽  
Business World ◽  
Board Committees ◽  
Corporate Governance Mechanisms ◽  
The Global Financial Crisis

This paper focuses on corporate governance applied in Malaysia and how it contributes to the success of the company. Over recent years, with corporate scandals and the global financial crisis, the new idea of corporate governance has attracted rising scrutiny in the business world. It is viewed as a legal obligation that requires the fostering of the integrity of the law and the delivery of ethical advice. Corporate governance is seen as an significant resource for corporate financial efficiency, and investor investment decisions have become a more serious issue, with the result that the relationship between corporate governance mechanisms and financial performance assessment has drawn researchers ' attention in established and emerging cities over the last decade. A total of 215 firms on the KLSE (Kuala Lumpur Stock Exchange) were listed for this report in 2017. Results have demonstrated that corporate governance indicators have a major effect on company efficiency and business value assessment in general. Through analyzing the structure of the group, the ROA and Tobin q calculation variables had a major positive impact. In comparison, the CEO duality was positively associated with all dependent variables, and the number of board committees was found to be negatively correlated with all calculated variables, and strongly correlated with ROA. The challenges of corporate governance are addressed in the final part of the paper.

Corporate Governance: What Are the Issues?

2020 ◽  
pp. 10-42
Author(s):  
Helmut K. Anheier ◽  
Christoph M. Abels
Keyword(s):  
Corporate Governance ◽  
Global Financial Crisis ◽  
Shareholder Primacy ◽  
Board Diversity ◽  
Corporate Governance Mechanisms ◽  
Corporate Governance Codes ◽  
History Of ◽  
Increasing Demand ◽  
The Global Financial Crisis ◽  
Corporate Social

Traditionally, corporate governance is about agency problems caused by the division of ownership and control. This chapter moves beyond this understanding. Starting with a theoretical overview, the chapter reviews different approaches to corporate governance and discusses shareholder primacy in light of the increasing demand for corporate social responsibility. Afterwards, a brief history of the development of corporate governance codes is given, followed by the role of corporate governance during the global financial crisis. Different corporate governance mechanisms, such as independent directors, board composition, and member diversity, as well as executive remuneration are subsequently discussed. Problems specific to corporate governance of technology companies are also highlighted, as well as the lessons Germany’s co-determination law can teach for the understanding of board diversity. The chapter concludes with a brief reflection on shareholder primacy, a diversifying corporate world, and the future of corporate governance codes.

scholarly journals CORPORATE GOVERNANCE: THE GATEWAY TO A ROBUST CORPORATE FINANCIAL PERFORMANCE IN MALAYSIA

2020 ◽  
Vol 8 (7) ◽  
pp. 91-98
Author(s):  
Khairi Aseh ◽  
Kamal Kenny ◽  
Ravindran Pathmanathan
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Global Financial Crisis ◽  
Descriptive Analysis ◽  
Corporate Financial Performance ◽  
Board Committees ◽  
Corporate Scandals ◽  
The Global Financial Crisis ◽  
The Impact ◽  
The Relationship

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.

scholarly journals Effectiveness of corporate governance and measurement challenges

2016 ◽  
Vol 14 (1) ◽  
pp. 297-303
Author(s):  
Mridula Sahay
Keyword(s):  
Corporate Governance ◽  
Financial Crisis ◽  
Performance Indicators ◽  
Global Financial Crisis ◽  
Key Performance Indicators ◽  
The Other ◽  
Business World ◽  
The Global Financial Crisis ◽  
Stakeholder Expectation ◽  
Crisis Situations

Growth and profits are key performance indicators for sustainable Corporations. As a result of this, competition between corporations has become intense with everyone trying to outperform the other. In this process there are performers, losers, winning situations and crisis situations. These outcomes are a result of how effectively the corporations/organizations are managed/governed. The Business World in the last few years has witnessed a financial crisis due to several reasons. One of the key reasons for the crisis has been attributed to lack of good and effective Corporate Governance. In light of the Global Financial Crisis that began in 2007, this paper tries to establish the importance of effective corporate governance. The paper has traced these failures stemming from the perspective of corporate governance by looking at different reports. It goes on to define a Corporation from the perspective of the stakeholder expectation, and the importance of Governance, it brings out the systemic gaps against this background. It further goes to identify the factors contributing to effective corporate governance, how it could be measured and the challenges involved in the process. Based on this understanding it proposes an approach which can be used to define a framework to measure the effectiveness for Corporate Governance.

scholarly journals Does good corporate governance pay off in the long-run? Evidence from stock market segment switches in Brazil

2019 ◽  
Vol 17 (3) ◽  
pp. 1
Author(s):  
Lars Norden ◽  
Luiz Moura
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Stock Returns ◽  
Fixed Effects ◽  
Global Financial Crisis ◽  
Positive Impact ◽  
Good Corporate Governance ◽  
Long Run ◽  
Abnormal Stock Returns ◽  
The Global Financial Crisis

<p>We investigate the long-run effects of higher standards of corporate governance in the stock market. We consider Brazilian firms that switched from the traditional segment to the Nível 1, Nível 2 or Novo Mercado since 2000. We document that higher standards of governance result in significantly higher abnormal stock returns in the long run, controlling for firm and time fixed effects. The positive impact increased after the Global Financial Crisis, market microstructure has improved, and the market impact is stronger for financially healthy firms. Evidence suggests that committing to higher standards of corporate governance paid off for Brazilian firms in the long run.</p>

scholarly journals Remuneration policy and corporate governance: Story from Indonesia, Malaysia, India, Singapore, Australia, and United States

2015 ◽  
Vol 13 (1) ◽  
pp. 614-620
Author(s):  
Agung Nur Probohudono ◽  
Payamta Payamta
Keyword(s):  
United States ◽  
Corporate Governance ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Manufacturing Companies ◽  
Factors Affecting ◽  
Significant Difference ◽  
Negative Effect ◽  
The Global Financial Crisis

Objective - Remuneration becomes an interesting research project since the occurrence of global financial crisis in the world’s economic. Remuneration relates to the corporate governance issues as well as agency theory. The objective of this research is to test the factors affecting remuneration in 6 countries (Indonesia, Malaysia, India, Singapore, Australia, and United States). Design/ Methodology/ Approach - The research takes samples from 929 manufacturing companies on the list of stock exchange in 6 Countries during 2010 up to 2013 by using purposive judgment sampling. The years are chosen considering those are the years when the companies in those 6 countries underwent a recovery from the global financial crisis impact. Result - There are significant differences in remuneration distribution between the companies with compensation committe or those without. Country/the company location in several ways could give significant difference related to remuneration distribution. Surprisingly, Company size and Compensation committee give negative effect towards remuneration distribution.

scholarly journals COMPARATIVE ANALYSIS OF COMMERCIAL BANKS GOVERNMENT OWNED AND PRIVAT

2018 ◽  
Vol 1 (1) ◽  
Author(s):  
Yuli Anwar
Keyword(s):  
Corporate Governance ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Risk Profile ◽  
Good Corporate Governance ◽  
Healthy State ◽  
Analysis Technique ◽  
Private Banks ◽  
The Government ◽  
The Global Financial Crisis

The global financial crisis that occurred in 2008, the opening of free trade of Southeast Asia (MEA). As well as the use of new methods in the assessment of the health of the bank directly or indirectly impact on the health of the banking performance changes. This study aims to determine the differences between the health levels of government-owned banks and national enterprises listed on the Indonesia Stock Exchange in 2013 and 2014. An assessment of the soundness of banks is an assessment of the factors RGEC the risk profile (risk profile), corporate governance good (good corporate governance), earnings (earnings), and capital (capital). Banks are becoming a sample of 27 banks of the population of 41 banks with purposive sampling method. The data analysis technique used is the Independent sample T-test.The results showed that the condition of banks in terms of risk profile, corporate governance and capital in a healthy state with PK-II both in 2013 and 2014. In terms of profitability shows that state-owned banks in better shape with a very healthy predicate either in 2013 or 2014 . Meanwhile, a national privately owned banks in the state are healthy enough to PK-III both in 2013 and 2014. in addition, the results also showed that there were no differences between the health levels of government-owned banks and national private sector. Partially factor risk profile, corporate governance and capital did not show any significance between the government and private banks nationwide. While the earnings factor show opposite results.

scholarly journals Examining bank mergers and acquisitions in Greece before the outbreak of the sovereign debt crisis

2014 ◽  
Vol 11 (4) ◽  
pp. 171-183 ◽  
Author(s):  
Michail Pazarskis ◽  
Despoina Charalampidou ◽  
Panagiotis Pantelidi ◽  
Dimitrios Paschaloudis
Keyword(s):  
Mergers And Acquisitions ◽  
Sovereign Debt ◽  
Business Performance ◽  
Global Financial Crisis ◽  
Positive Impact ◽  
Stock Exchange ◽  
Debt Crisis ◽  
Accounting Data ◽  
Before And After ◽  
The Global Financial Crisis

In this study Mergers and Acquisitions (M&As) and business performance of banks in Greece are examined through an accounting approach. Using accounting data (financial ratios), the post-merger performance of a sample of Greek banks, listed on the Athens Stock Exchange that executed at least one merger or acquisition in the four-year-period from 2004 to 2007, is investigated. For the purpose of the study, a set of nineteen ratios is employed, in order to measure banks’ operating performance and to compare pre- and post-merger performance for three, two and one year before and after the M&A. The results revealed that M&As had a positive impact on the post-merger performance of merger-involved firms, except of dividend policy, which had to be moderate and conservative, because of the global financial crisis. The results showed that the effect of M&As on sample’s business performance, is not direct, but it becomes obvious during the next two years. Last, the number of ratios, which are statistically and significantly changed, is bigger as the control interval widens and the common ratios have an identical variation.

scholarly journals HOW CORPORATE GOVERNANCE AND CASH HOLDINGS AFFECT EARNINGS QUALITY AND FIRM VALUE

TRIKONOMIKA ◽  
2020 ◽  
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Cash Holdings ◽  
Mediating Effect ◽  
The Global Financial Crisis ◽  
The Impact

This study analyzes the impact of corporate governance (CG) and cash holdings (CH) on earnings quality and the implication on firm value. We hypothesize that earnings quality mediate the impact of CG and CH on firm value. Banking sector was chosen as the object of research because this sector is quite vulnerable to the global financial crisis. The population consists of banking companies listed on the Indonesia Stock Exchange (IDX) in the period of 2013-2017. Data were analyzed by multiple regression models using SPSS software. The results show that CG and CH have a significant effect on earnings quality. But this influence shows the opposite direction of expectations. Banks with good CG have lower earnings quality, and banks with high CH show better earnings quality. Only CG that has a significant effect on firm value with negative direction. This study did not find the mediating effect from both variables.

scholarly journals Corporate governance and conglomerate diversification strategy – evidence from Vietnam

2018 ◽  
Vol 13 (6) ◽  
pp. 1578-1596 ◽  
Author(s):  
Thi Xuan Trang Nguyen
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Board Composition ◽  
Governance Mechanisms ◽  
Content Type ◽  
Unrelated Diversification ◽  
Corporate Governance Mechanisms ◽  
Control Devices ◽  
Interest Alignment ◽  
The Relationship

Purpose The purpose of this paper is to examine the impact of internal corporate governance mechanisms, including interest alignment and control devices, on the unrelated diversification level in Vietnam. Additionally, the moderation of free cash flow (FCF) on these relationships is also tested. Design/methodology/approach The study is based on a balanced panel data set of 70 listed companies in both stock markets, Ho Chi Minh Stock Exchange and Hanoi Stock Exchange, in Vietnam for the years 2007–2014, which gives 560 observations in total. Findings The results show that if executive ownership for CEOs is increased, then the extent of diversification is likely to be reduced. However, the link between unrelated diversification level and executive stock option, another interest alignment device, cannot be confirmed. Among three control devices (level of blockholder ownership, board composition and separation of CEO and chairman positions), the study finds a positive connection between diversification and blockholder ownership, and statistically insignificant relations between the conglomerate diversification level and board composition, or CEO duality. Additionally, this study discovers a negative link between diversification and state ownership, although there is no evidence to support the change to the effect of each internal corporate governance mechanism on the diversification level of a firm between high and low FCF. Practical implications The research can be a useful reference not only for investors and managers but also for policy makers in Vietnam. This study explores the relationship among corporate governance, diversification and firm value in Vietnam, where the topics related to effectiveness of corporate governance mechanisms to public companies has been increasingly attractive to researchers since the default of Vietnam Shipbuilding Industry Group (Vinashin) happened in 2010 and the Circular No. 121/2012/TT-BTC on 26 July 2012 of the Vietnamese Ministry of Finance was issued with regulations on corporate governance applicable to listed firms in this country. Originality/value This research, first, enriches current literature on the relationship between corporate governance and firm diversification. It can be considered as a contribution to the related topic with an example of Vietnam, a developing country in Asia. Second, the research continues to prove non-unification in results showing the relationship between corporate governance and conglomerate diversification among different nations. Third, it provides a potential input for future research works on the moderation of FCF to the effects of corporate governance on diversification.

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