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Director independence and performance of listed companies: evidence from Malaysia

Author

Listed:
  • Fairuz Ramli
  • Anuar Nawawi
  • Rashid Ameer

Abstract

This paper investigates the relationship between director independence and firm performance, as well as ownership of firms and firm performance in Malaysia. We find that independent outside directors and foreign directors have a significant positive effect on firm performance after controlling for the influence of other corporate governance variables such as firm ownership and board sizes. The study demonstrates that when a critical mass of outside directors' independence is achieved, this has a significant economic impact on the firm performance. The results have implications for rethinking board composition requirements in the emerging markets.

Suggested Citation

  • Fairuz Ramli & Anuar Nawawi & Rashid Ameer, 2010. "Director independence and performance of listed companies: evidence from Malaysia," International Journal of Business Governance and Ethics, Inderscience Enterprises Ltd, vol. 5(4), pages 280-300.
    • Handle: RePEc:ids:ijbget:v:5:y:2010:i:4:p:280-300
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    Cited by:

    1. Pao-Chen Lee, 2019. "Chinese Supervisory Board-An Experiential Case," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 4(3), pages 19-33, March.

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