Abstract
The aim of this paper is to examine the characteristics and conduct of boards in non-financial Malaysian firms, with a particular emphasis on the companies’ financial leverage, using panel data spanning from 2012 to 2018. Overall, the study reveals that the relationship between board attributes and a firm’s financial leverage is significant, but mixed. Notably, we find that extremely small or large boards are ineffective in maintaining the optimal financial leverage level that benefits all stakeholders. Our study concludes that board independence is negatively correlated with financial leverage, whereas the tenure of board members is negatively associated with financial leverage. Additionally, board diversity exhibits a statistically significant and positive correlation with financial leverage. Currently, the Malaysian corporate governance code advocates announcing regulations to regulate corporate structures.
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