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Governance Structure and Practice in Malaysia: Board of Directors’ Role and Responsibilities

In: Corporate Governance

Author

Listed:
  • Normahiran Yatim

    (Universiti Teknologi MARA)

  • Haslinda Yusoff

    (Universiti Teknologi MARA)

Abstract

The Malaysian government has established a strong regulatory framework that underpins the national corporate governance (CG) ecosystem through local rules, regulation and best practices. Following that, this paper seeks to explore the CG compliance – governance structure and practices – of public listed companies in Malaysia. Particularly, this paper investigates the Board-related structure and practice which comprise of board size, board composition, board committee, CEO duality, multiple directorships, board meeting and the age limit for director. Content analysis was used to collect the CG related information of the top 100 companies via their annual reports. The information disclosed was then analyzed against the four key Malaysian CG-related requirements, namely; Companies Act 1965, BM CGG, MCCG and the CG Blueprint 2011. It was found that the board size of the Malaysian companies is appropriate and manageable, with majority of the companies complying with the requirements pertaining to the appointments of INED. Additionally, many companies favor for the separation between CEO and Chairman of the Board in governing their businesses. The companies also regard multiple directorships as a ‘healthy’ practice; and that their practices in conducting board meeting also in comply with the referred requirements. This study also found that all companies had appointed some of their BODs with the age ranging between 50 and 69. Overall, these findings put forward an insight that majority of the Malaysian companies studied complied beyond the minimal requirement of CG.

Suggested Citation

  • Normahiran Yatim & Haslinda Yusoff, 2014. "Governance Structure and Practice in Malaysia: Board of Directors’ Role and Responsibilities," Springer Books, in: Samuel O Idowu & Kiymet Tunca Çaliyurt (ed.), Corporate Governance, edition 127, chapter 0, pages 199-228, Springer.
    • Handle: RePEc:spr:sprchp:978-3-642-45167-6_11
    DOI: 10.1007/978-3-642-45167-6_11
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    Cited by:

    1. Muhammad Haris & Hongxing Yao & Gulzara Tariq & Hafiz Mustansar Javaid & Qurat Ul Ain, 2019. "Corporate Governance, Political Connections, and Bank Performance," IJFS, MDPI, vol. 7(4), pages 1-37, October.
    2. Nurtika Ekawati & Unggul Purwohedi & Ari Warokka, 2021. "The Influence of Risk Management, Third-Party Funds and Capital Structure on Banking Sector Financial Performance in Indonesia and Thailand with Corporate Governance as Moderating Variable in 2015-201," Oblik i finansi, Institute of Accounting and Finance, issue 4, pages 71-80, December.
    3. Khar Mang Tan & Fakarudin Kamarudin & Bany-Ariffin Amin Noordin & Norhuda Abdul Rahim, 2019. "Firm Efficiency of East Asia Countries: The Impact of Board Busyness," Vision, , vol. 23(2), pages 111-124, June.

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