The determinants of board structure : the impact of corporate governance reform and the role of datukship in Malaysian boards.

Summary This thesis aims to study corporate governance in Malaysia. We examine the determinants of board structure, the regulatory framework, the impact of corporate governance reform and the role of Datukship in Malaysian boards. The first chapter discusses the literature applied to our topic. The second chapter examines the impact of corporate governance reforms in Malaysia. We study the trends and determinants of board structure and the level of compliance of firms with the Malaysian Corporate Governance Code (the Code) requirement. We find that board independence is increasing, that board structures correlate with the level of operation of firms, and that the level of compliance of Malaysian firms is higher than that of UK firms. The third chapter is an event study that measures the effects of the announcement of the adoption of the Code. Our results suggest that the market reacts positively to the reform. Government-linked companies (GLCs) react positively to the announcement but the effect is more moderate for non-GLCs. The fourth chapter presents a new approach to study the role of Datuk directors. Datuk, is an honorary title granted by the Kings in Malaysia. The objective of this chapter is to study whether the presence of Datuk in a board of directors benefits the board and improves the financial performance of the firm.