Introduction

Abstract

Corporate governance is a key to corporate success since good corporate governance is associated with better firm performance and firm value (Brown & Caylor, 2004; Conheady et al., 2014; Sami et al., 2011). Weak corporate governance systems may lead to corrupt practices, currency depreciation and stock market crashes. The Asian financial crisis that struck in July 1997 is a case in point whereby inefficient corporate governance frameworks derailed rapidly the East and Southeast Asian economies of South Korea, Malaysia, Thailand, Indonesia and the Philippines (Johnson et al., 2000; Rasiah, 1998). Campos et al. (2002) produced empirical evidence to show that 80% of investors were willing to invest in companies with good corporate governance at a premium price. The Organization for Economic Co-operation and Development (OECD) enacted a series of corporate governance principles in 1998 to guide its member and non-member countries to evaluate and improve their legal, economic and political system to improve corporate governance. Thus, it is clear that good corporate governance has a critical role to play to protect investors and regulate the smooth development of capital markets across the world.