Corporate Governance and Ownership Structure in the Malaysian Corporate Sector

Samad, Fazilah Abdul

doi:10.1016/s1569-3732(04)09014-0

Cited by 14 publications

(9 citation statements)

References 4 publications

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“…They also noted that ownership structure plays an important role in structuring the corporate governance mechanism, especially in countries with weaker governance. Samad (2004) in her study of 731 public listed companies in KLSE concluded that ownership concentration has also been found to lead better firm performance. She also argued that ownership concentration is the most important factor in shaping the corporate governance system in Malaysia.…”

Section: Ownership Structure and Monitoringmentioning

confidence: 99%

Institutional Ownership Heterogeneity and Firm Performance: Evidence from Malaysia

Katan¹,

Nor²

2015

IJEF

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The roles of institutional owners in alleviating agency problem and its effect on firms have been studied extensively in corporate finance. However, these researches have mixed results because most have treated institutional owners as a homogenous group. Drawing on previous research, this study differentiates institutional owners as transient or dedicated owners. These two groups of institutional owners differ significantly in terms of size of holdings, purposes, goals as well as monitoring efforts. The objective of this study is to determine how the institutional ownership structure i.e. transient or dedicated ownership affect firm performance within the context of agency theory. To determine whether treating the sample homogenously or heterogeneously has different effects on firm performance, this study also examine the effect of total ownership (whereby the sample is treated homogeneously) on firm performance. Using panel data that span from 2002 to 2006, several hypotheses are tested based on data of firms listed on Bursa Malaysia's Kuala Lumpur Composite Index (KLCI) using hierarchical regression analysis methodology. The empirical results indicate that total institutional ownership and dedicated ownership have no significant effect towards firm performance. Transient ownership, however, has statistically significant effect on firm performance. These results show that institutional ownership is heterogeneous with transient ownership structure monitor the management themselves. The establishment of the differing effect of institutional ownership due to the heterogeneous nature of ownership suggests that future research in this area must take into account the heterogeneity.

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Section: Ownership Structure and Monitoringmentioning

confidence: 99%

Institutional Ownership Heterogeneity and Firm Performance: Evidence from Malaysia

Katan¹,

Nor²

2015

IJEF

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“…Precisely, the ownership could detect the agency problem whereby the conflict of interest between agents and principals or majority shareholders could be justified. According to Samad (2004), the distribution of power between managers and shareholders is determined by the ownership concentration. Furthermore, according to Hitt, Ireland & Lee (2000), ownership can be defined as the legal right over the use, disposal and fruits, of means of production indeed in society.…”

Section: Ownership Structure and Performancementioning

confidence: 99%

Board Education, Growth and Performance of Family CEO Listed Firms in Malaysia

Ibrahim

Zulkafli

Jabeen

2020

International Journal of Banking and Finance

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This paper examines the relationship between board education, board size, growth, ownership and firm performance of family CEO and nonfamily CEO listed firms in Malaysia. A sample of 37 firms and data were collected over a period of five years from 2012 to 2016. The 37 samples of family firms were subdivided into family CEO (21), and non-family CEO (16) firms. The independent variables were board education as measured by the proportion of board degrees (BDEG) and the proportion of board professional qualifications (BPRO), board size (BSIZE), growth, and ownership. Meanwhile, firm performance was measured by using return on equity (ROE) and return on assets (ROA). The findings showed that there was a significant difference between family CEO and non-family CEO firms at a five percent level for board professional qualifications confirming that altruism and nepotism were observed among family members which supported the argument of characteristics of nepotism such as granting jobs to family members regardless of merit. In addition, this study also found board professional qualifications as significant but negatively related to external firm performance in family CEO firms. This showed that board education has not really been emphasized among board members. Besides, growth has significant influence on family firm performance which is evidently reflected in their contribution to the country’s GDP.

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“…In Malaysian public listed firms, shareholding is highly concentrated in the hands of small number shareholders (La Porta, Lopez-de-Silanes, Shleifer and Vishny, 2000;Samad, 2002). Samad (2002) reports that the average of the first largest shareholding was 30.30 percent and the five largest shareholdings were 58.84 percent, which accounted for more than half of the voting shares.…”

Section: Corporate Governance Proxies Ownership Concentration and Audmentioning

confidence: 99%

“…Samad (2002) reports that the average of the first largest shareholding was 30.30 percent and the five largest shareholdings were 58.84 percent, which accounted for more than half of the voting shares. Furthermore, Kamardin and Haron (2011) mention that around 71.4 percent of firms on the Main Board and Second Board of Bursa Malaysia were controlled by their five largest shareholders, having a shareholding of more than 50 percent and were under majority ownership.…”

Section: Corporate Governance Proxies Ownership Concentration and Audmentioning

confidence: 99%

Corporate Governance & Auditor Choice in Malaysia

2017

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The aim of this paper is to investigate the determinants of firm's auditor choice in Malaysia in respect of their corporate governance mechanisms. A logit regression model was developed to test the impact of firms' internal corporate governance mechanism on auditor choice decisions made by public listed companies listed on main board of Bursa Malaysia from year 2006 to 2015. Five variables are used to proxy for firm's internal corporate mechanism which are the ownership concentration, the duality of CEO and chairman of BOD, the size of audit committee, the size of BOD and the number of independent directors on the board. All auditors in Malaysia were classified into Big Four and non-Big Four, assuming Big Four auditors can provide higher quality audit services. The final result show that firms with less concentrated ownership, with larger size of audit committee, larger size of the BOD, with lower proportion of independent directors on the board, or in which CEO and BOD's chairman are not the same person are more likely to hire a high-quality auditor. Hence, it suggests that when benefits from lowering capital raising costs are trivial, firms with good corporate governance mechanism are prone to choose a high-quality auditor.

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Corporate Governance and Ownership Structure in the Malaysian Corporate Sector

Cited by 14 publications

References 4 publications

Institutional Ownership Heterogeneity and Firm Performance: Evidence from Malaysia

Institutional Ownership Heterogeneity and Firm Performance: Evidence from Malaysia

Board Education, Growth and Performance of Family CEO Listed Firms in Malaysia

Corporate Governance & Auditor Choice in Malaysia

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