Governance structure and practice in malaysia: Board of directors' role and rsponsibilities

• Published in: Corporate Governance: An International Perspective
• Main Author: Yatim N.; Yusoff H.
• Format: Book chapter
• Language: English
• Published: Springer-Verlag Berlin Heidelberg 2014
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-84930579599&doi=10.1007%2f978-3-642-45167-6_11&partnerID=40&md5=dcf828e37bda9c9ee538653e4946a5a2

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. © Springer-Verlag Berlin Heidelberg 2014. All rights are reserved.