| General note |
This thesis is a study of corporate governance focusing on corporate board practices and, to a lesser extent, business leadership and corporate ethics of business firms in Malaysia. Board practices here not only encompass the profile of the board, but also structures such as those involving committees and processes (the style, practices and procedures) that cater for the conduct of board functions and help the board deal with shareholders and ensure transparency as well as disclosures. The study considers the top 150 companies listed on the Main Board (as at end of 1999) of Bursa Malaysia [formerly known as Kuala Lumpur Stock Exchange (KLSE)] in term of market capitalisation. Of the 150 companies, only 52 responded to the questionnaire. First, the thesis looks at the manner corporate directors carry out their responsibilities and duties in order to establish any causal link between their practices with their performance. Second, assessments were made to establish the linkage between business leadership as well as corporate ethics and their influence and impact on business performance. Data on board practices, business leadership and corporate ethics were gathered using a survey questionnaire. In-depth interviews were also carried out. For the financial performance of firms, data was collected mainly from the companies' annual reports as well as from the BM annual handbooks as well as from the database of the BM's website. Three statistical methods were used to analyse the data, namely, Quartile Analysis, Correlation Coefficient Analysis and Three Tier Analysis. Also carried out is an evaluation of the relationship between Corporate Governance practices and firm's performance. The findings revealed that there is a linkage between corporate board practices and performance as firm with effective corporate board tend to have better financial performance. The thesis demonstrated the usefulness of effective corporate board structures such as executive committees, audit, remuneration, governance & nominating and strategic committees. It was found that business leadership and corporate ethics were important attributes of effective governance and were closely associated with effective corporate boards. Thus, in order to add value to the present corporate board practices, it is essential that current practices, leadership attributes and the ethical approach must consistently be reviewed and enhanced to meet the dynamic business environment in the face of the uncertainty of globalisation. This study contributes to the existing corpus of knowledge on good corporate governance practices and accountability in the Malaysia corporate sector. |