The (Perceived) roles of corporate governance reforms in Malaysia: The views of corporate practitioners

Abstract

Purpose -The purpose of this paper is to understand the roles of corporate governance reforms in Malaysia following the 1997/1998 Asian crisis from the perspectives of corporate managers.Design/methodology/approach -The primary evidence used is drawn from a series of indepth semi-structured interviews with Malaysian corporate managers involved in the overseeing of the governance structures within their companies.Findings -This study shows that most interviewees believed that an appropriate corporate governance system could play a role in resolving the problems associated with the interlocking and concentrated corporate ownership structure in Malaysia. However, the effectiveness of the corporate governance reforms in dealing with this issue is questionable. It also reveals that Malaysian companies 'changed' their corporate governance practices predominantly to recover (foreign) investor confidence lost during the crisis and to fulfil the legal requirements enforced by the government, where the latter was under pressure from the international community (especially, the World Bank and IMF) to 'improve' the Malaysian corporate governance practices after the crisis.Originality/value of paper -This paper adds to the literature on corporate governance, especially in the context of developing countries. Prior research investigating corporate governance issues in developing countries has been limited, particularly the lack of in-depth examination of corporate governance practices from the perspectives of corporate managers. This paper will be of great value to researchers and practitioners seeking to gain a better understanding of the roles of corporate governance in Malaysia.

Anglo-American governance adoption in non-Anglo-American settings

“…In her opinion, the lack of critical and strategic orientation of the board affects the performance of the company negatively. This finding is inconsistent with existing literature which suggests that CG guides boards of directors towards being professionally competent (Liew, 2008). Similar to Kenya, some directors also reported a neutral influence of CG on the performance of firms in Cameroon (Table III).…”

“…They concluded that culture greatly determines the meaning, which CG practitioners attach to it. In another study, Liew (2008) further used a mix of documentary analysis and semi-structured interviews with 19 CG practitioners. Liew (2008) found that CG practitioners perceive 'good' CG to benefit their firms through ensuring that managers remain professional, hence reducing agency problems.…”

“…In another study, Liew (2008) further used a mix of documentary analysis and semi-structured interviews with 19 CG practitioners. Liew (2008) found that CG practitioners perceive 'good' CG to benefit their firms through ensuring that managers remain professional, hence reducing agency problems. We expect such a positive perception of CG to act as an incentive for firms to enhance their CG practices.…”

“…To the best of our knowledge, this is the first large-scale comparative qualitative study (using three distinct emerging economies) examining how CG practitioners rationalise CG regulations together with how this is influenced by peculiarities of individua l countries institutional environment. Accordingly, extant individual country studies have documented largely negative perceptions concerning CG implementation by practitioners in various emerging economies including Nigeria (Okike, 2007;Angaye and Gwilliam 2008), Malaysia (Liew, 2007(Liew, , 2008, Mauritius (Soobaroyen and Sheik-Ellahi, 2008), Kenya (ROSC Kenya, 2010) and Bangladesh (Uddin and Choudhury, 2008). These papers postulates that modifying the provisions of international CG codes adopted within emerging economies, may promote their effectiveness leading to minimal conflicts with demands of local institutional environments.…”

The impact of corporate governance elements on environmental reporting : the case of public listed companies in Malaysia

“…Thus, in order to achieve better corporate governance, substantial reforms have also been introduced particularly the amendments to the Securities Industries Act 1983 by the Securities Commission and listing rules of Bursa Malaysia (Liew, 2006). Finally, amendment was made in 2007 on the Malaysian Code of Corporate Governance (MCCG).…”