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How Does Directors’ Remuneration and Board Structure Impact on Firm Performance in Malaysia Telecommunication Industry?

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  • Noor Ayuernie Ibrahim

    (Faculty of Business and Accountancy, Universiti Selangor, Seksyen 7, 40000 Shah Alam, Selangor, Malaysia)

  • Noor Nasyikin Md Zin

    (the Faculty of Business and Accountancy, Universiti Selangor, Seksyen 7, 40000 Shah Alam, Selangor, Malaysia)

  • Aza Azlina Md. Kassim

    (Faculty of Business and Accountancy, Universiti Selangor, Seksyen 7, 40000 Shah Alam, Selangor, Malaysia)

  • Fazilah Tamsir

    (Faculty of Business and Accountancy, Universiti Selangor, Seksyen 7, 40000 Shah Alam, Selangor, Malaysia)

Abstract

Remuneration is broadly used as an incentive that affects decisions made and strategies planned by directors which cause great impact on firm performance. This study aims to investigate the relationship among directors’ remuneration, board size, and firm performance of Malaysian listed companies under Telecommunication Industry. The firm’s performance is measured by return on assets (ROA). This study consists of 25 observations with a sample of five Malaysian listed companies for the period of 2013 to 2017. The regression results show directors’ remuneration and board size have negative relationship with firm performance. This suggests that high remuneration does not able to motivate and retain directors in order to perform their duty and work harder for the best interest of shareholders. The result also shows that larger boards unable to ensure effectiveness in monitoring management and thus, did not associated with better performance. For future research, it is recommended that this study be expanded using more samples from other industries and other measurement of firm performances such as growth and ratings.

Suggested Citation

  • Noor Ayuernie Ibrahim & Noor Nasyikin Md Zin & Aza Azlina Md. Kassim & Fazilah Tamsir, 2019. "How Does Directors’ Remuneration and Board Structure Impact on Firm Performance in Malaysia Telecommunication Industry?," European Journal of Business and Management Research, European Open Science, vol. 4(4), August.
    • Handle: RePEc:epw:ejbmr0:v:4:y:2019:i:4:id:50096
    DOI: 10.24018/ejbmr.2019.4.4.96
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