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

Yatim, Normahiran; Yusoff, Haslinda

doi:10.1007/978-3-642-45167-6_11

Cited by 10 publications

(12 citation statements)

References 21 publications

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“…Corporate governance provides structure and an effective framework to set and monitor the performance of banks by establishing a strong principal-agent relationship (Mehran 2003). Given the importance of deregulation, globalization, increasing risk, and investor protection, as well as the positive role of the banking sector in economic growth, corporate governance has significant importance for the sustainability of the banking industry, because corporate governance practices help to build sustainable value for the banking industry (Yatim and Yusoff 2014). Both the Organization for Economic Co-operation and Development (OECD 1999) and Basel Committee on Banking Supervision (BCBS 1999;BCBS 2006) produced and made recommendations regarding the best corporate governance practices for a sound financial system, which is important for sustained economic growth (de Andres and Vallelado 2008;Ferdous et al 2014).…”

Section: Introductionmentioning

confidence: 99%

“…The adoption of sound corporate governance practices ensures the implementation of all prudential regulations and prevents the financial institutions from penalties, thus mitigating the regulatory risk and enhancing performance. Therefore, it is equally important to examine whether these corporate governance practices made a substantial contribution in achieving the improved performance of banks, which has vital importance for the sustainability of the whole financial system (Yatim and Yusoff 2014).…”

Section: Introductionmentioning

confidence: 99%

“…Board Size: The board of directors (BODs) protects bank interests and provides strategic directions to monitor the achievement of the banking system's strategic objectives. The duties and responsibilities of BODs are important aspects of corporate governance practices, which lead to achieving sustainable growth for banks (Yatim and Yusoff 2014). The addition of many directors to the board brings more knowledge, expertise, and experience, which lead to a sustained competitive advantage, raising the performance of the banking industry (Barroso et al 2011).…”

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confidence: 99%

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Corporate Governance, Political Connections, and Bank Performance

Haris

Yao

Tariq

et al. 2019

IJFS

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This study investigates the impact of corporate governance characteristics and political connections of directors on the profitability of banks in Pakistan. The study uses the data of 26 domestic banks over the latest and large period of 2007–2016. Our findings firstly affirm that bank profitability is negatively affected by the presence of politically connected directors on the board, reporting significantly lower return on assets, return on equity, net interest margin, and profit margin. Secondly, our findings also affirm the negative political influence on the sustainability of the banking industry, reporting significantly lower return on assets, return on equity, net interest margin, and profit margin during the government transition of banks having politically connected directors sitting on their board. Our findings further report an inverted U-shaped relationship between board size and bank profitability, suggesting that a board size beyond 8–9 members decreases the profitability. The study further finds a positive impact of board composition, board independence, and director compensation on bank profitability, while also finding a negative impact of frequent board meetings, presence of foreign directors, and audit committee independence.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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confidence: 99%

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Corporate Governance, Political Connections, and Bank Performance

Haris

Yao

Tariq

et al. 2019

IJFS

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“…With regard to board busyness literature, the past findings were dominated by controversy, supported by two competing conventional views. A group of scholars have documented the beneficial effect of board busyness (Lei & Deng, 2014; Lu, Wang, & Dong, 2013; Sarkar & Sarkar, 2009; Shu, Yeh, Chiu, & Yang, 2015; Yatim & Yusoff, 2014). Supporting the reputation hypothesis, the offers of external directorships are a consequence of director reputation; the busy boards (boards with many directors that hold multiple directorships) are reputable that signals good quality and indeed favourable to firms (Fama & Jensen, 1983; Ferris et al, 2003; Sarkar & Sarkar, 2009).…”

Section: Studies On Board Busynessmentioning

confidence: 99%

Firm Efficiency of East Asia Countries: The Impact of Board Busyness

Tan

Kamarudin

Noordin

et al. 2019

Vision: The Journal of Business Perspective

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This study aims to examine the impact of board busyness on firm efficiency under the concept of technical efficiency. By employing conventional agency theory and busyness hypothesis, the logical relationships between board busyness and firm efficiency are established. In the first stage of analysis, this study employs data envelopment analysis (DEA) to investigate firm efficiency. While in the second stage of analysis, this study adopts panel regression analysis to empirically examine the proposed effect of board busyness on firm efficiency, based on a sample of 400 listed firms in the countries of significant East Asia region from 2009 to 2015. This study discovers the significant and negative impact of board busyness on firm efficiency, suggesting that the busy board significantly impedes firm efficiency due to their overcommitted issue and therefore consistent with busyness hypothesis and agency theory. This study highlights practical implication for managers who pursue to enhance firm efficiency in attaining the goals of profit maximization by understanding how board busyness impacts the firm efficiency. In addition, this study calls for regulators and government policymakers to review the restrictions on board busyness in preventing the overcommitted issue of busy boards.

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“…Possessing a code of good corporate governance provides banking institutions with a regulatory framework to rate the conduct and transparency, reduces agency costs that affects the expected return and informs the shareholder of the risk to which the entity is affected (Rokibul Kabir et al, 2019). Given the importance of deregulation, globalization, increased risk and investor protection, as well as the positive role of the banking sector in economic growth, corporate governance is of significant importance for the sustainability of the banking industry, since corporate governance practices help generate sustainable value for the banking industry (Yatim & Yusoff, 2014). Consequently, it was proposed to examine the impact of the main pillars of good corporate governance on the banks' equity return, an indicator measured through the equity return ratio (ROE).…”

Section: Introductionmentioning

confidence: 99%