The Board Governance Mechanism and the Effect of Concentration Ownership on Malaysia Companies Performance

Abstract

Malaysian Code of Corporate Governance (MCCG) had provide a standard guideline for the companies to strengthen the boards of directors accountabilities and transparent in disclosing their financial information to the shareholders. Numerous studies have been done to studies the relationship between corporate governance and performance but the result still inconclusive. This study aim to identify the effect of moderator proxy by concentration ownership would strengthen the relationship between Board Governance Mechanism Index (BGMI) and performance proxy by Tobin Q of Malaysian companies listed on Bursa Malaysia. Data were gathered from 218 Malaysian public listed companies started from 2009 until 2013 using the STATA in testing the research hypotheses. There were six dimension of corporate governance mechanism index matters were developed in this study by adopting and adapting the Corporate Governance Index and governance scorecard developed by Minority shareholders Watchdog Group (MSWG) in 2009 and 2012 including some of the items selected under the MCCG 2008 and MCCG 2012. The result obtained will determining the existent of ownership concentration would be one of the factors that influence the relationship between corporate governance and performance of Malaysian company.