Board Mechanisms and Performance of Government-Linked Companies on Bursa Malaysia

Abstract

Abstract As the major shareholder in the Government-Linked Companies (GLCs), the Malaysian Government embarked on the transformational initiative of the GLCs. One of the main initiatives was to enhance board effectiveness through its Green Book which initially launched in 2006. Hence, this takes an interest in research to explore whether the listed GLCs’ performance are enhanced through different board mechanisms. Our aim is to probe the relationship between board mechanisms and performance (as measured by Share Price Returns and Cash Flows) of 16 GLCs listed on the Bursa Malaysia from 2007 till 2012. Both cross-sectional and panel data analyses have been carried out for this purpose. However, the results revealed that only the firm size has significant positive impact on the Cash Flows over the 6 years basis. None of the board mechanisms variables have significant relationship with the performance measurement over the 6 years analysis.