Despite the key role of the Chief Executive Officer (CEO),

Purpose The purpose of this paper is to investigate the relation of corporate governance (CG) attributes, such as separate leadership (SL) structure, independent chair (IC) of the board, and the proportion of independent directors on the board (Bind) recommended by the new Malaysian Code on Corporate Governance (2012), with firms’ market performance measured by share market price. Design/methodology/approach The paper uses a randomly selected sample of 150 non-financial Malaysian listed companies. To find the distinct impact of the code, the paper explicitly divides the sample into two-year pre-context (2010-2011) and two-year post-context (2013-2014) of the code. Besides descriptive statistics, the study also employs correlation and multiple regression estimators. Findings By comparing the pre-context and post-context of the code, the study found that SL and Bind have a significant positive relation while IC of the board has a significant negative relation with share market price after enactment of the code. Research limitations/implications The paper has a limitation of using only two years of data due to its non-availability particularly after enactment of the code. The findings show that the new code slightly improved compliance to the CG attributes investigated. Based on findings, the study also recommends further improvement in compliance to CG codes and other voluntary regulations in Malaysia. Originality/value Besides contributing to the limited and incongruent literature in pre-context and post-context of CG regulations, the paper also provides important insights for regulators and policy makers of the emerging markets like Malaysia.

The recent corporate scandals revealed misreporting and poor quality of financial information reporting. The misreporting evidenced that board of directors couldn't ensure its role of effective monitoring to minimize management's conflicts, frauds and misrepresentations of information. These in turn, diverted the attention of regulators and policy makers towards independence of the board among others. Malaysia, like other countries, also advised independence of the board in its third code of corporate governance (MCCG 2012) introduced in March, 2012. The code recommended independence of the board to ensure effective monitoring of management. Agency theory and many CG regulations around the world posit that strengthening independence of the board improves firms' reporting quality of financial information. Therefore, this paper proposes to investigate how some specific attributes of the new regulation regarding independence of the board impacted quality of financial information reporting in Malaysian listed companies. The paper proposes a pre and post analysis of the code by comparing 2 years pre (2010-11) and 2 years post context of the code. The proposed study will contribute to the limited literature with inconclusive results. Moreover, it will also provide insights for shareholders, banks, financial institution, security commission and Bursa Malaysia.

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