Corporate Governance and Firm Performance: Do Shariah-Compliant Companies on Bursa Malaysia Exhibit Good Corporate Governance?

Abstract

The intention of this study is to determine whether a significant relationship between corporate governance and financial performance exists among 100 Shariah-compliant companies listed on the Bursa Malaysia in the Consumer Products and Services sector, and whether they demonstrate good governance practices. This study extracts annual data from 2011 – 2021. Panel data analysis (Fixed and Random effects) model along with Hausman test, were adopted in this research to examine the effects of corporate governance (CG) attributes which are board size, CEO duality, number of board meetings, directors with accounting qualifications, number of Malay directors, number of women directors and board independence. Firm performance is measured by Return on Assets (ROA), Return on Equity (ROE), and Earnings Per Share (EPS). Findings of this study revealed that companies that adopted MCCG practices did not improved their overall performance, and it has minimum impact on financial performance. Keywords: Corporate Governance; Firm Performance; Shariah-Compliant; Panel Data Analysis