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Article
Publication date: 5 July 2011

Azmi Abd. Hamid

This paper aims to investigate whether or not there exists a relationship between network governance structures in GLCs and NGLCs and performance in Malaysia. In pursuing this…

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Abstract

Purpose

This paper aims to investigate whether or not there exists a relationship between network governance structures in GLCs and NGLCs and performance in Malaysia. In pursuing this objective, the study will explore whether the structures are significantly different and, if so, will seek to establish whether the relationship between their structures and performance of the two groups differs.

Design/methodology/approach

The study adopts a matched‐pair analysis between GLCs and NGLCs in terms of board listing, types of industry and paid‐up capital. All data related to variables were collected mainly from the annual reports of companies and the Bursa Malaysia websites. Besides paired sample t‐tests, univariate tests were also conducted to establish whether there is a statistically‐significant relationship between each independent variable and firm performance measured by either ROA or ROE.

Findings

The results showed that there were statistically‐significant differences for both network governance structures of senior government officers (SGO) and politicians (POL) as directors between GLCs and NGLCs for the period under study. Therefore, the first hypothesis of significant differences between the network governance structures of GLCs and NGLCs is fully supported. However, the presence and contribution of both SGO and POL to firm performance are much more noticeable in NGLCs compared to GLCs. BSZ is generally positively correlated with performance and this relationship is stronger for GLCs than NGLCs. As for RDU, no statistically‐significant relationship was found in all years. This indicates that there is no clear indication of any relationship between RDU and performance measured by ROA and ROE in all groupings of companies.

Research limitations/implications

It is impossible to get an exact pair of GLCs and NGLCs companies. However, both groups of companies have been paired as close as possible based on their paid‐up capital. The research was conducted in a period of three years only and before the transformation process of GLCs. As such, the findings might not reflect the general long‐term performance of GLCs.

Originality/value

This paper contributes to the literature as it examines the relationship between network governance variables to firm performance in the context of GLCs and NGLCs in Malaysia.

Details

Journal of Financial Reporting and Accounting, vol. 9 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 14 March 2016

Padmanabha Ramachandra Bhatt

The purpose of this study was to find whether there was any significant difference in performance between government-linked companies (GLCs) and private-owned companies (POCs) and…

3708

Abstract

Purpose

The purpose of this study was to find whether there was any significant difference in performance between government-linked companies (GLCs) and private-owned companies (POCs) and there was any significant improvement in performance of GLCs after Malaysian Government ' s initiatives to transform the GLCs to high-performance companies.

Design/methodology/approach

Panel data estimation techniques were used to run the regression in this study.

Findings

It was found that there was no significant difference in performance level between GLCs and POCs. It was also found that the performance level of GLCs had improved significantly after the initiation of GLCs ' transformation programme by the Malaysian Government.

Originality/value

The implication of the results of this study is that state-owned enterprises in developing countries like Malaysia can be relevant and important to take care of social responsibilities and needs, as also they can perform at par with private companies. There is no need for privatization of government-owned enterprises; rather, it needs corporatization. Government-owned enterprises can play an important role to drive national development.

Details

International Journal of Law and Management, vol. 58 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 7 June 2011

Nor Hawani Wan Abd Rahman, Mustaffa Mohamed Zain and Norashfah Hanim Yaakop Yahaya Al‐Haj

The main aim of this study is to assess the level of corporate social responsibility (CSR) disclosure of 44 government‐linked companies (GLCs) listed on Bursa Malaysia and to…

5626

Abstract

Purpose

The main aim of this study is to assess the level of corporate social responsibility (CSR) disclosure of 44 government‐linked companies (GLCs) listed on Bursa Malaysia and to ascertain the relationship of certain company characteristics; namely size, age, profitability and leverage on the total CSR disclosure from the year 2005 to 2006.

Design/methodology/approach

Content analysis is deployed to determine CSR disclosure. A disclosure index consisting of 16 items was developed based on four general themes: human resource, marketplace, community and environment to assess the disclosure level. The relationship between company characteristics and total disclosure was examined using multiple linear regression analysis.

Findings

The major finding of this study is that the theme of disclosure has shifted from human resource to marketplace. This is followed by human resource, community and, finally, environment. Ironically, companies are not only disclosing good news, but also bad/negative news. This study provides further evidence that is, to a certain extent, some GLCs have influenced other companies' practices to disclose CSR information. Company size was found to be positively significant associated with the total disclosure. The remaining variables were found to be insignificant in explaining the total disclosure.

Originality/value

This is the first paper that looks into CSR activities, extent, themes and the determinants of CSR disclosure in the annual reports of Malaysian GLCs. The Malaysian Government, Bursa Saham, Security Commission and other relevant parties could take heed of the findings to further improve CSR awareness, practices and disclosures and quality in GLC.

Details

Social Responsibility Journal, vol. 7 no. 2
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 11 July 2016

Padmanabha Ramachandra Bhatt

The purpose of this paper is to study the effect of Malaysian Code on Corporate Governance (MCCG) on the performance of the listed companies in Malaysia.

2994

Abstract

Purpose

The purpose of this paper is to study the effect of Malaysian Code on Corporate Governance (MCCG) on the performance of the listed companies in Malaysia.

Design/methodology/approach

Panel data estimation techniques were used to run the regression in this study, following Baltagi (1995). The authors have selected 116 listed companies to Bursa Malaysia during the period 1996-2014, to study the effect of corporate governance on firm performance. Listed companies in Malaysia are mandatory to comply with MCCG rules and regulations.

Findings

It was found that there was a significant improvement in the performance of listed companies after Malaysian Government’s implementation of MCCG (2000) which means that MCCG matters for firm performance in Malaysia. It was also found that there was no significance difference in the overall impact of implementation of MCCG on performance level between government-linked companies (GLCs) and private companies (PCs).

Research limitations/implications

The authors have selected only 116 listed companies to Bursa Malaysia during the period 1996-2014, to study the effect of corporate governance on firm performance. The selection of the data was based on the availability of data in Thomson data stream.

Originality/value

The findings had contributed to the understanding that the MCCG has improved significantly the performance of listed companies in Malaysia.

Details

International Journal of Law and Management, vol. 58 no. 4
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 12 October 2010

Shanthy Rachagan

The paper aims to focus on diverse ownership structures, especially the controlling shareholder system and their impact on corporate governance.

1743

Abstract

Purpose

The paper aims to focus on diverse ownership structures, especially the controlling shareholder system and their impact on corporate governance.

Design/methodology/approach

The paper deliberates the agency problems in concentrated shareholder‐listed companies in general which are related transactions involving controlling shareholders, significant corporate actions, and control transactions. The paper further studies agency issues in Malaysian‐listed companies specifically relating to government‐linked companies and family‐owned companies.

Findings

The paper identifies agency problems in concentrated shareholding‐listed companies which are government linked or family owned and then provide solutions to overcome these problems.

Originality/value

Specific agency problems in Malaysian‐listed companies and solutions to overcome them are presented in this paper.

Details

Journal of Financial Crime, vol. 17 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

Article
Publication date: 1 April 2019

Anindita Chakrabarti and Ahindra Chakrabarti

The purpose of this paper is to determine the factors affecting the capital structure of companies engaged in the Indian energy sector.

2286

Abstract

Purpose

The purpose of this paper is to determine the factors affecting the capital structure of companies engaged in the Indian energy sector.

Design/methodology/approach

Capital structure theories and empirical literature have been reviewed to formulate propositions concerning the factors/variables determining the capital structure of Indian energy companies. The examination is done using panel data techniques for the sample 141 companies operating in the Indian energy sector.

Findings

The results show firms’ age, asset turnover ratio, liquidity and firms’ size to be significant determinants of capital structure for the Indian energy companies, while profitability, debt service capacity, sales growth, non-debt tax shield and tangibility ratio to be insignificant determinants. Historically, profitability has shared a significantly negative relationship with debt ratio; however, the relation here is not significant.

Research limitations/implications

The focus of the current study is on Indian energy sector, the results obtained will not be applicable for other sectors.

Originality/value

The current research gives an insight into the determinants of capital structure of the companies engaged in the Indian energy sector, which are mostly overlooked due to the laws, policies and regulations governing the sector as a whole.

Details

International Journal of Energy Sector Management, vol. 13 no. 1
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 14 September 2012

Muslim Har Sani Mohamad, Hafiz Majdi Abdul Rashid and Fekri Ali Mohammed Shawtari

As the major shareholder, in 2004, the Malaysian Government embarked on the transformation initiative of the Government Linked Companies (GLCs). One of the main initiatives was to…

4849

Abstract

Purpose

As the major shareholder, in 2004, the Malaysian Government embarked on the transformation initiative of the Government Linked Companies (GLCs). One of the main initiatives was to enhance board effectiveness through its Green Book. Soon after, the progress performance review revealed that the GLCs reported improved earnings. Such drastic performance turnarounds triggered the question as to whether earnings quality is at stake. The purpose of this paper is to examine the impact of the tightening of corporate governance mechanisms on earnings management (EM) activities of the GLCs.

Design/methodology/approach

The earnings data for two periods (pre‐ and post‐transformation) were collected and tested to determine whether the GLCs experienced any improvement of board monitoring role in curbing EM activities in the post‐transformation period.

Findings

The main findings show that there is an increase of EM activities in the post‐transformation policy. Furthermore, the study also reveals that none of the corporate governance mechanisms has much impact on curbing activities, except for board meetings and leadership structure in the post‐transformation period. The board meetings and separation of chairman and chief executive officers in the companies were shown to only have a negative impact on EM activities in the post‐transformation period. Although the study has shown a positive preliminary impact from tightening the corporate governance of the GLCs, weak earnings quality might undermine the efforts to sustain such a transformation.

Originality/value

The paper contributes to the limited body of literature concerning the impact of corporate governance on earnings management by examining such impact using Government Linked Companies in Malaysia after introducing the transformation programme.

Details

Asian Review of Accounting, vol. 20 no. 3
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 5 June 2009

M.A. Norhayati and A.K. Siti‐Nabiha

The purpose of this paper is to explain the institutionalization process of the performance management system (PMS) in a Malaysian government‐linked company (GLC). The study…

7887

Abstract

Purpose

The purpose of this paper is to explain the institutionalization process of the performance management system (PMS) in a Malaysian government‐linked company (GLC). The study specifically looks at the changes brought by the GLC transformation programme introduced by the government.

Design/methodology/approach

An explanatory case study method is used whereby data are collected through semi structured interviews, document reviews, informal conversations and observations.

Findings

Despite attempts to link the organisational activities to the system through the business operating plan, the data reveal that the PMS‐related activities have somehow been viewed as a routine mechanism for appraising the employees' performances and become decoupled from the organisational activities. Thus, the new PMS did not really change the way organisational members view and do things in the organisation.

Research limitations/implications

This study shows that the intention to institutionalise a new practice may not be materialised if there are not enough forces to support the change. The adoption of the new PMS practices may be due to isomorphic pressures to mimic other organisations in the same environmental field leading to ceremonial adoption of the practice.

Originality/value

This research provides evidence to the government that the process involved in transforming the organisational culture of a government‐linked organisation by using accounting tools might be time consuming, costly and subject to resistance. Hence, any change management programme introduced in a government‐linked organisation should have strong top management support, good financial standing as well as a reliable technical backup to the programme.

Details

Journal of Accounting & Organizational Change, vol. 5 no. 2
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 8 June 2012

Elinda Esa and Nazli Anum Mohd Ghazali

The purpose of this paper is to investigate whether there has been a change in the level of corporate social responsibility (CSR) disclosure and to determine whether corporate

6406

Abstract

Purpose

The purpose of this paper is to investigate whether there has been a change in the level of corporate social responsibility (CSR) disclosure and to determine whether corporate governance attributes influence CSR disclosure in corporate annual reports of Malaysian government‐linked companies (GLCs).

Design/methodology/approach

The annual reports of 27 GLCs for two years (2005 and 2007) were analysed using content analysis. Multiple regression analysis was performed to identify factors influencing CSR disclosure in annual reports.

Findings

Consistent with expectations, the paired‐sample t‐tests showed that there was an increase (significant at the 1 percent level) in the extent of CSR disclosure. The multiple regression analysis revealed that board size was positively associated and statistically significant (at the 1 percent level) with the extent of CSR disclosure.

Research limitations/implications

The regression model reported an R2 of 33.9 percent, which means that almost 66 percent of factors influencing CSR disclosure in Malaysian GLCs have not been captured by the model. These other factors may perhaps be identified through other research methods such as questionnaire surveys or interviews.

Practical implications

The findings appear to suggest that the government efforts in promoting CSR among GLCs through the introduction of the Silver Book in 2006 have had some positive impact on CSR disclosure in annual reports. The results also imply that larger board size through wider exchange of ideas and experience could lead to better appreciation and involvement in corporate social activities and hence disclosure in annual reports.

Originality/value

This paper is one of the few studies to examine CSR disclosure and corporate governance attributes in GLCs after the introduction of new initiatives to promote CSR.

Details

Corporate Governance: The international journal of business in society, vol. 12 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 2 November 2015

Hairul Azlan Annuar

The purpose of this paper is to ascertain whether different types of institutional investor in Malaysia are involved in the corporate governance of their investee companies, and…

Abstract

Purpose

The purpose of this paper is to ascertain whether different types of institutional investor in Malaysia are involved in the corporate governance of their investee companies, and, if yes, to what extent is the level of the involvement.

Design/methodology/approach

A qualitative approach, consisting of a series of interviews with 18 senior investment managers of different types of institutional investor, was chosen.

Findings

The findings suggest that lessons learnt from the fallout of the Asian crisis has made Malaysian institutional investors not only to be more prudent in managing their total funds and in making equities investment decisions, but has resulted in a more active participation in their “core” investee companies apart from merely discharging their voting rights. Interview analysis revealed that government-linked investment companies are championing the cause and could possibly affect the overall level of institutional investors’ involvement, which bode well for the future of the corporate governance system of the country.

Research limitations/implications

Generalisations may be an issue when interviews are used as the method of inquiry. Also, the sample is not random, as access to many managers depended on recommendations. In addition, respondents were consciously selected to obtain different types of institutional investors that included government and non-government linked.

Originality/value

There is a lack of work on studying the involvement of institutional investors in developing countries, whereby previous work and literature review were predominantly based upon the experience of Western economies.

Details

Journal of Accounting & Organizational Change, vol. 11 no. 4
Type: Research Article
ISSN: 1832-5912

Keywords

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