Corporate Governance Structure and Firm Performance

A Case Study of Malaysian University Holdings Companies

  • Wan Nordin Wan Hussin Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia
  • Norfaiezah Sawandi Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia
  • Hasnah Shaari Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia
Keywords: Corporate Governance, Firm Performance, University Holdings Company, Malaysia, Case Study

Abstract

This study analyses the corporate governance structure and performance of Malaysian public university holdings companies from 2010 to 2014. The sample comprises eight public university holding companies. Data was gathered by using three methods; survey, semi- structured interview, and documentation review. The board structure and board sub-committees’ practices of these case organizations were evaluated against the best practice recommendation of (i) the Malaysian Code on Corporate Governance (MCCG) 2012 (ii) the Green Book 2006, and (iii) other relevant acts. The firm performance is measured using four indicators which are sales, profit before tax, net profit margin and return on equity. Overall, this study finds that the practice and structure of corporate governance of the holding companies are excellent. However, there are companies that did not comply with certain parts of the recommendations of Malaysian Code on Corporate Governance 2012 (MCCG) and the Green Book. The study also observed that the practice of governance between the university companies is not uniform. The analysis of firm performance, two companies, show the highest net profit margin and return on equity. One company reported negative earnings and return on equity. The other five companies reported the net profit margin below 10%. The findings provide an insight into the ministry of education as the shareholder to improve the monitoring of the public university holding companies.

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Published
2017-10-01
How to Cite
Wan Hussin, W. N., Sawandi, N., & Shaari, H. (2017). Corporate Governance Structure and Firm Performance. Indian-Pacific Journal of Accounting and Finance, 1(4), 55-64. Retrieved from http://ipjaf.omjpalpha.com/index.php/ipjaf/article/view/28
Section
Main Section