THE IMPACT OF CORPORATE GOVERNANCE CHARACTERISTICS ON MALAYSIAN FIRM PERFORMANCE
DOI:
https://doi.org/10.55197/qjssh.v6i3.628Keywords:
impact, corporate governance, firm performance, board of directorsAbstract
With the rise of 982 public listed companies, the highest since 2008, this research helps suggest to corporations in Malaysia to reflect on the importance of having a transparent and constructive standard of corporate governance. This research focuses on the significant impact of non-financial factors which include the number of independent directors, gender diversification, and board size and its impact on a company's financial performance in Malaysia. In effort to avoid conflict and bias within the organization, the Securities Commission of Malaysia has implemented the Code of Corporate Governance 2021, Section 5.2, that requires at least half of the board members comprised of independent directors. Good governance also includes diversification. In an article from the Straits Times, Finance Minister of Malaysia stated that companies with large capital in Malaysia will mandate one women director. Followed by the board size, based on recent research from Harvard Law School Forum, the size or number of the board of directors does have an impact on firm performance. Results showed that the three independent variables which include board size, board independence, and board gender diversification all have a positive significant correlation to the overall financial performance of their companies. This research will leverage on secondary data collection, regression, correlation analysis and descriptive statistics.
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