Lee, Wanling (2013) The determinants of board structure : the impact of corporate governance reform and the role of datukship in Malaysian boards. École Doctorale Sciences de Gestion TSM (Toulouse).

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Abstract

Cette thèse vise à étudier la gouvernance des entreprises en Malaisie. Nous examinons les déterminants de la structure du conseil d'administration, le cadre réglementaire, l'impact de la réforme de la gouvernance d'entreprise et le rôle de Datukship dans les conseils d’administration de Malaisie. Le premier chapitre traite de la littérature appliqué à notre sujet. Le deuxième chapitre examine l'impact des réformes de la gouvernance d'entreprise en Malaisie. Nous étudions les tendances et les déterminants de la structure du conseil d’administration et le niveau de conformité des entreprises avec l'exigence du Code Malaisien de la Gouvernance d'Entreprise (le Code). Nous constatons que l'indépendance du conseil d'administration augmente, que les structures du conseil d'administration sont en corrélation avec le niveau de fonctionnement des entreprises et que le niveau de conformité des entreprises malaisiennes est plus élevé que celui des entreprises britanniques. Le troisième chapitre est une étude d’événement qui mesure les effets de l’annonce de l'adoption du Code. Nos résultats suggèrent que le marché réagit positivement à la réforme. Les entreprises liées au gouvernement (GLCs) réagissent positivement à l'annonce mais l’effet est plus modéré pour les entreprises non-GLCs. Le quatrième chapitre présente une nouvelle approche afin d’étudier le rôle des directeurs Datuk. Datuk, est un titre honorifique accordé par les Rois en Malaisie. L’objectif de ce chapitre est d’étudier si la présence de Datuk dans un conseil d’administration profite à celui-ci et améliore la performance financière de l'entreprise.

This thesis aims to study the corporate governance in Malaysia. We examine the determinants of board structure, regulatory framework and the impact of corporate governance reform in Malaysia, and the role of Datukship in Malaysian boards. This thesis consists of four chapters. The first chapter discusses in general the literature reviews related to our three articles. The first part of the chapter describes the corporate governance theoretical framework. The second part presents a summary of all relevant empirical literatures to our study and makes a comparison on the findings between the developed and developing countries. The gap between these studies is our research interest. The second chapter examines the impact of the reforms, namely Malaysian Code on Corporate Governance by investigating the trends and determinants of board structures in Malaysia. The Code, derived from the recommendation on corporate governance reform in UK, codified the best practices of good governance and described optimal corporate governance structures. However, due to different context of business practices and nature of business environment in emerging markets, we expect that the determinants for the board structure will be different from the developed markets. We also investigate the compliance level of board of directors with the requirement in the Code. In each analysis the results are used to compare with the findings in developed markets. Furthermore, we extend the study to look into the impacts across different size and different types of firms. Overall, we find that the board independence shows an upward trend throughout the years. The compliancy level is higher than UK firms in general. Our results also suggest that board size and board independence are correlated with the operation level of the firms. Different from most findings in US market, we find no evidence that the measures under monitoring hypothesis are related to board independence. The third chapter is an event study, in which we measure the announcement effects of the adoption the Code. The implementation the Code is the most sweeping governance reform in Malaysia to enhance the corporate governance practices. Using an event study methodology demonstrated by Karafiath (1998), our paper concentrates on the announcement effect of those key dates associated with the rules-making process, until the integration of the Code to the listing requirement use the We group the firms into different industry portfolio and different portfolio of size to test the abnormal returns. We then examine specifically the impact of the reform on government-linked companies (GLCs), which are always been claimed to have influence from government on its corporate governance practices. Our findings suggest that the investors perceived the new implementation as good news and market reacts to the news on the final implementation stage but not the initial planning stage. A further investigation on political connected firms shows that GLCs react less positively to the announcement than non-GLCs portfolio. The results for portfolio by size also show a significant positive response to the announcement of new listing requirements. The forth chapter presents a novel attempt to study the role of Datuk Directors in Malaysia. Datuk, is a honorifics titles granted by the King in Malaysia on their birthday and perceived to be something that elevates a person’s social status. It is expected that directors with titles add reputations to the firm and have better network with the important stakeholders. The presence of Datuk on board is a unique phenomenon in Malaysia that provides us a testing ground to study its impact to the board. The goal of this paper is to gain insight on how the presence of Datuk in the board adds value to the board function and further, improves the firm financial performance.