Corporate Governance and Performance: Evidence from Industrial Product and Service Sector in Bursa Malaysia

Abstract

An empirical study was conducted to investigate the corporate governance variables (board size, board independence, board meeting and duality) that are related to the firm performance (ROA) in industrial product and service sector companies in Bursa Malaysia, with a particular focus on the Main Market. This paper will examined on firm performance based on return on assets (ROA) public-listed firms’ industrial product and service sector. The study adopts by examines the annual reports from the year 2014 to 2018. A multiple regression analysis was conducted on the whole population of listed companies in this sector. The empirical results suggest firm performance had significant relationship with board size, board independence and duality. In contrast, the firm performance is insignificant with board meeting. The outcome of this study could provide insight for the evidence to relevant regulatory bodies in Malaysia to look further on the effectiveness on the code of corporate governance particularly public-listed firms’ from industrial product and service sector in Bursa Malaysia. Furthermore, the research performed for this study specifically focused on identifying governance mechanisms that have a proven impact on enhanced firms’ performance, regardless of whether they are marked as a good practice in regulation or codes. The results provide practical guidance for company directors, as well as a useful guidance for the people empowered with formulating governance regulation and codes.