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Past studies show that companies’ connection with the government (or politically connected companies (PCCs)) contributed negatively to their financial performance. The grabbing hand theory suggests that political connection demand companies to serve political and social obligation that exhaust companies’ financial resources. The purpose of this paper is to extend the previous studies by examining the role of monitoring mechanisms, specifically corporate governance mechanism and institutional ownership (IO), whether they weaken or strengthen the financial performance of PCCs in Malaysia.

The sample consists of all companies listed on the Main Board of Bursa Malaysia (previously known as Kuala Lumpur Stock Exchange) for the year of 2004-2007. The time periods were chosen because there were no significant economic and political events that could possibly distorted the financial and non-financial data.

The findings show that companies’ political connection (the presence of political figure or government representative as members of board of director) has consistently showing negative relationship with performance. The result is consistent with the grabbing hand theory that argues that companies’ connection with government would actually destroy companies’ value. The monitoring role of corporate governance as measured by the percentage of independent board members does not have any significant effect on firm’s performance. The monitoring role of corporate governance as measured by the composition of independent board members have shown a positive significant effect on the company’s performance. However the second monitoring mechanism, the percentage of institutional investors, have a tendency to weaken the company’s performance.

The findings of this study provide an additional understanding of the consequence of government intervention on companies’ performance. This study also highlights the role of monitoring mechanism (independence board members and IO) in strengthening or weakening the performance. The findings suggest that the proper appointment criteria for board members should be seriously considered to ensure better corporate governance structure. Therefore, the formation of the nomination committee as suggested by the current Malaysian Code of Corporate Governance play an important contribution to ensure candidates nominated as board members have proper credentials and qualifications to carry out responsibilities as board members.

The purpose of this paper is to examine the effect of voluntary risk management disclosure (VRMD) on firm value (FV).

This study uses content analysis approach to collect the VRMD data. FV is represented by three variables: market capitalization, Tobin’s Q and market to book value of equity ratio. Based on a sample of 395 firms listed on the main market of Bursa Malaysia in 2011, this study uses multivariate statistical tests to examine the association between VRMD and FV.

Based on the regression analysis, this study found that the VRMD has a positive and significant relationship with FV. Even though the authors hypothesize that damaging voluntary risk management disclosure (DVRMD) will have a negative and significant relationship with FV, the regression analysis shows that the DVRMD is not significantly related to FV. As expected, the relationship between beneficial voluntary risk management disclosure (BVRMD) and FV is positive and significant. The findings provide evidence that should be of interest especially to firms in terms of deciding upon whether to provide or avoid disclosing voluntary risk management information to their stakeholders.

Notwithstanding the critical empirical findings, this study is limited to only focusing on a one year data. The authors acknowledge the fact that findings from a one year data might not be easily generalized to other time periods. The authors believe a stronger argument could be obtained from evidence based on a longitudinal study or data that incorporate multiple economic conditions. The study highlights the fact that risks management information is important to investors in Malaysia when they make their investments decisions.

To date, regulatory bodies emphasize more on financial risk management disclosure through the enforcement of MFRS 7; while non-financial risk information is less emphasized in current guidelines such as Malaysian Code on Corporate Governance (MCCG) (2012) and Recommended Practice Guide 5 (Revised), which only requires firms to disclose information about non-financial risk management without specific details. As this study has provided evidence on the significance of non-financial risk management disclosures in the capital market, this study could be useful for the regulatory bodies to develop more detailed guidelines on non-financial risk management disclosure in the future.

Most of prior literatures are found to focus on the study of factors that influence the VRMD (such as Linsley and Shrives, 2006; Abraham and Cox, 2007; Hassan et al., 2009; Ismail and Abdul Rahman, 2011). Studies about the effects of voluntary risk management information disclosure is however very scant. Miihkinen (2013) studied the effects of risk management disclosure on information asymmetry. This paper adds to Miihkinen (2013) by investigating the relationship between VRMD and FV. This paper is expected to be the first to investigate on the empirical usefulness of VRMD in a developing country.

Firm performance has become a thriving research field. However, a review of previous studies shows that the answers to several fundamental questions remain vague and require further investigation. Thus, the purpose of this study is twofold. The first is to determine the extent of the involvement of political connections (PCs) in Pakistani-listed companies, and the second is to examine the association between PCs and firm financial performance with director efficacy’s moderating role.

A data set of 221 non-financial companies listed on the Pakistan Stock Exchange for 10 years (2008–2017) was analysed using panel-corrected standard error regression. Additionally, the authors address endogeneity issue by using Hackman two-stage estimation and lagged variables regression.

The study found that PCs negatively affected the firm’s financial performance, and director efficacy as a moderator strengthened this relationship. The result is consistent with the political economy theory that argues that an unstable political system and a weak judicial system will strongly affect investors and their rights.

The impact of political influence on the corporate sector remains a concern for policymakers, regulators, investors, financial experts, auditors and academic researchers. This study’s findings are that an effective board of directors can strengthen the company’s best practices by controlling political connectedness to protect all the interested parties, particularly investors, and restore their confidence. Therefore, the results of this study can assist all stakeholders when a PCs exists to make the right decisions.

The study extends the literature in terms of theoretical contribution that uses an integrative approach to combine political economy theory, agency theory and resource dependence theory to address the moderating role of director efficacy with an association between PCs and firm financial performance. To the best of the authors’ knowledge, no extant research has investigated the association between PCs and firm financial performance using five aspects of PCs, along with moderator director efficacy.

This study aims to examine the association between corporate governance mechanism and firm performance measured by return on assets (ROA). The question is whether an effective corporate governance mechanism is able to increase the firm performance of Bursa and Construction Industry Development Board (CIDB) Klang Valley, Malaysia. The main purpose of this study is the in-depth analysis of the corporate governance mechanism and construction industry Malaysia via Bursa and CIDB.

Following the primary and secondary data comparative approach, data are collected from 46 listed construction companies and 250 CIDB-registered SMEs for the financial year 2015. Descriptive statistics, Pearson correlation test are reported, and model estimation is performed using logistic regression.

The empirical outcome shows that the corporate governance mechanism is significant in case of the CIDB Malaysia-registered SMEs. While, it has insignificant impact on firm’s performance for Bursa Malaysia.

This paper offers evidence specifically for Bursa and CIDB Malaysia construction industry. It can also provide guidance to the board of directors for the subscription of shares under the corporate governance measures at Bursa Malaysia. The findings also suggest that CIDB should increase awareness regarding institutional investment to assist the securities market to develop further.

This study gives an indication about corporate governance, specifically for the CIDB-registered SMEs and Bursa Malaysia. It also discusses the matter of firm performance under the light of corporate governance.