Purpose
This purpose of this paper is to examine the implications of the Revised Malaysian Code on Corporate Governance (2007) toward the effectiveness of the board and audit committees in Malaysian manufacturing companies. Since the manufacturing firms are dominantly held by Chinese firms, this paper is extended to incorporate the implication of ethnicity on board and audit committees’ effectiveness.
Design/methodology/approach
Using a sample of 201 firms from fiscal year 2004-2009, the data set consists of a total of 1,206 firm-year observations. Analysis is carried out using correlation analysis, multiple and logistic regression analyses.
Findings
The findings reveal that board and audit committees’ effectiveness is positively associated with earnings management pre- and post-Revised Malaysian Code on Corporate Governance (2007). A higher number of ethnic members in the board are also positively associated with earnings management.
Research limitations/implications
This study is limited to some industries in the manufacturing sector due to the special characteristics of this sector and covers mostly large firms. The results may not therefore be applicable to small firms. Finally, the study does not consider possible interaction between the board and audit characteristics which may be significant in influencing earnings management.
Practical implications
The findings show that the corporate governance mechanism in Malaysian firms is currently inadequate in preventing earnings management and extra effort is needed to improve board governance.
Originality/value
This paper contributes to the current literature on the issues of corporate governance effectiveness and board ethnicity in the current economic and political structure in Malaysia.
This study examines the social media usage of Malaysian millennials in planning their domestic holidays. This study integrated the theory of planned behaviour (TPB) and technology acceptance model (TAM) variables by adding electronic word-of-mouth (e-WOM), as it is a crucial factor influencing the travel industry nowadays. Data were collected from 301 Malaysians. The results show that e-WOM is the greatest antecedent influencing Malaysian millennials to use social media in planning their domestic holidays. Local tourism organizations such as Tourism Malaysia could gain an understanding of the issue through this study, and the promotion of local tourism through social media could be developed to reach millennials in Malaysia.
This study examines the effectiveness of audit committee independence when moderated by firms’ family ownership. This is to investigate the implication of revised Malaysia Code on Corporate Governance (2007) that requires majority composition of independence directors in the audit committee. We study 1,206 firm-year observations between fiscal years 2004 to 2009 of firms listed in Bursa Malaysia. The findings suggest that independent directors are more effective in curbing earnings management when there is stronger ownership of family members. Our research offers insights on the important of family institutional structures on corporate governance reforms in Malaysia. Malaysian family firms are mostly traditional firms which have built their reputation and strength in the industry for many generations. The reputation built, improve shareholders confidence and reduce potential agency conflicts
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