Corporate Governance Effectiveness And Malaysian Takaful Companies Performance: The Moderating Role Of Shariah Committee Quality
Corporate Governance (CG) has drawn significant attention in the last two decades due to the critical role it plays in stabilizing global economies. As a result of several financial scandals and collapses of giant international companies, especially in IFIs and Takaful operators, many studies have e...
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uketd_dc |
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Universiti Sains Islam Malaysia |
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USIM Institutional Repository |
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en_US |
| topic |
Corporate governance and Islamic financial institutions Corporate governance -- Malaysia -- Case studies Takaful firms and industry |
| spellingShingle |
Corporate governance and Islamic financial institutions Corporate governance -- Malaysia -- Case studies Takaful firms and industry Monther Eldaia Corporate Governance Effectiveness And Malaysian Takaful Companies Performance: The Moderating Role Of Shariah Committee Quality |
| description |
Corporate Governance (CG) has drawn significant attention in the last two decades due to the critical role it plays in stabilizing global economies. As a result of several financial scandals and collapses of giant international companies, especially in IFIs and Takaful operators, many studies have examined CG, but the findings remain inconclusive. Moreover, previous studies recommended the researchers must examine other intervening variables, which may have an effect on the behaviours of directors and influence the relationship between board effectiveness and performance This study examined the effect of the Board of Directors (BOD) effectiveness and Audit Committee (AC) effectiveness on the performance of 11 Malaysian Takaful companies licensed by Bank Negara Malaysia over the period from 2010 to 2017. In addition, the moderating effect of Shariah Committee Quality (SCQ) was investigated. The study uses a panel data approach, and multiple regression was used to test various hypotheses. This study employed relevant governance theories to investigate the relationship between CG and a Takaful company’s performance. The board effectiveness considered in this study were board size, board independence, executive membership, Muslim directors, meeting frequency, and gender diversity. AC effectiveness included AC Chairman Specialization, AC size, AC independence, and meeting frequency. Firm performance was assessed by the return on assets (ROA), return on equity (ROE), and earnings per share (EPS), and an SCQ score was used to determine the quality of Shariah Committee (SC). The empirical investigation revealed mixed results. The findings showed the relationships between BODE and corporate performance ROA and ROE were significant for board independence, Muslim directors on the board, gender diversity, and board effectiveness as an aggregate. Executive membership had an insignificant effect on ROA, Board meetings frequency had an insignificant effect on ROA, ROE and EPS. AC chairman Specialization, AC size, AC independence, and AC effectiveness as composite score had a significant and positive relationship with ROE. AC size, AC independence and AC effectiveness had a significant positive effect on ROA. Meeting frequency had a negative and insignificant relationship with ROA, ROE, and EPS. In addition, AC chairman specialization had an insignificant relationship with ROA. Concerning the relationship with EPS, the findings revealed that board size, board independence, executive membership, Muslim directors in the board, gender diversity, and board director’s effectiveness as an aggregate score had a significant relationship with EPS. Moreover, the findings showed that the AC size and AC effectiveness had a significant and positive relationship with EPS. However, AC chairman specialization, AC independence had insignificant relationship with EPS. The findings indicate that SCQ positively moderated the relationship between BODE on ROA, ROE, and EPS. The results also showed ACE had a negative direct effect on EPS. The findings of this study contribute to the literature on CG and firm performance in the context of developing countries. The findings also have useful implications for policymakers, academics, and users of Malaysia's financial statements. |
| format |
Thesis |
| author |
Monther Eldaia |
| author_facet |
Monther Eldaia |
| author_sort |
Monther Eldaia |
| title |
Corporate Governance Effectiveness And Malaysian Takaful Companies Performance: The Moderating Role Of Shariah Committee Quality |
| title_short |
Corporate Governance Effectiveness And Malaysian Takaful Companies Performance: The Moderating Role Of Shariah Committee Quality |
| title_full |
Corporate Governance Effectiveness And Malaysian Takaful Companies Performance: The Moderating Role Of Shariah Committee Quality |
| title_fullStr |
Corporate Governance Effectiveness And Malaysian Takaful Companies Performance: The Moderating Role Of Shariah Committee Quality |
| title_full_unstemmed |
Corporate Governance Effectiveness And Malaysian Takaful Companies Performance: The Moderating Role Of Shariah Committee Quality |
| title_sort |
corporate governance effectiveness and malaysian takaful companies performance: the moderating role of shariah committee quality |
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Universiti Sains Islam Malaysia |
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my-usim-ddms-132682024-05-29T18:29:34Z Corporate Governance Effectiveness And Malaysian Takaful Companies Performance: The Moderating Role Of Shariah Committee Quality Monther Eldaia Corporate Governance (CG) has drawn significant attention in the last two decades due to the critical role it plays in stabilizing global economies. As a result of several financial scandals and collapses of giant international companies, especially in IFIs and Takaful operators, many studies have examined CG, but the findings remain inconclusive. Moreover, previous studies recommended the researchers must examine other intervening variables, which may have an effect on the behaviours of directors and influence the relationship between board effectiveness and performance This study examined the effect of the Board of Directors (BOD) effectiveness and Audit Committee (AC) effectiveness on the performance of 11 Malaysian Takaful companies licensed by Bank Negara Malaysia over the period from 2010 to 2017. In addition, the moderating effect of Shariah Committee Quality (SCQ) was investigated. The study uses a panel data approach, and multiple regression was used to test various hypotheses. This study employed relevant governance theories to investigate the relationship between CG and a Takaful company’s performance. The board effectiveness considered in this study were board size, board independence, executive membership, Muslim directors, meeting frequency, and gender diversity. AC effectiveness included AC Chairman Specialization, AC size, AC independence, and meeting frequency. Firm performance was assessed by the return on assets (ROA), return on equity (ROE), and earnings per share (EPS), and an SCQ score was used to determine the quality of Shariah Committee (SC). The empirical investigation revealed mixed results. The findings showed the relationships between BODE and corporate performance ROA and ROE were significant for board independence, Muslim directors on the board, gender diversity, and board effectiveness as an aggregate. Executive membership had an insignificant effect on ROA, Board meetings frequency had an insignificant effect on ROA, ROE and EPS. AC chairman Specialization, AC size, AC independence, and AC effectiveness as composite score had a significant and positive relationship with ROE. AC size, AC independence and AC effectiveness had a significant positive effect on ROA. Meeting frequency had a negative and insignificant relationship with ROA, ROE, and EPS. In addition, AC chairman specialization had an insignificant relationship with ROA. Concerning the relationship with EPS, the findings revealed that board size, board independence, executive membership, Muslim directors in the board, gender diversity, and board director’s effectiveness as an aggregate score had a significant relationship with EPS. Moreover, the findings showed that the AC size and AC effectiveness had a significant and positive relationship with EPS. However, AC chairman specialization, AC independence had insignificant relationship with EPS. The findings indicate that SCQ positively moderated the relationship between BODE on ROA, ROE, and EPS. The results also showed ACE had a negative direct effect on EPS. The findings of this study contribute to the literature on CG and firm performance in the context of developing countries. The findings also have useful implications for policymakers, academics, and users of Malaysia's financial statements. Universiti Sains Islam Malaysia 2021-11 Thesis en_US https://oarep.usim.edu.my/handle/123456789/13268 https://oarep.usim.edu.my/bitstreams/b8be91b6-45c8-496d-b25a-796dfbe60382/download 8a4605be74aa9ea9d79846c1fba20a33 https://oarep.usim.edu.my/bitstreams/ffb1da7a-6808-4bef-84d8-7647083fff29/download 2f14b6d2818fb461ccf689fc222acf97 https://oarep.usim.edu.my/bitstreams/02a43011-9270-44e6-a832-02bd2a95e325/download 14bd76504d62787b9ee6643ca73966c2 https://oarep.usim.edu.my/bitstreams/8b91caa5-2c1b-468a-b061-5ecb631f2ae8/download 729ab1e673dede0c90034e8e4059ae97 https://oarep.usim.edu.my/bitstreams/8f12e624-089f-4992-92f0-da9cdd7dfdb7/download c5a31314eda2c2506865eabc74560047 https://oarep.usim.edu.my/bitstreams/c8707cb9-bbff-462b-a1d2-ebf49bbd7e10/download 6108cb253bc141071e28c04ccaed9212 https://oarep.usim.edu.my/bitstreams/ee061254-9072-4caf-ae42-5cd14caf95be/download 5ca3e132e968fc6bb5163fc860759479 https://oarep.usim.edu.my/bitstreams/da8dcdd3-264b-41bf-a143-a94d82a820f4/download 50cb22c7026da77502d9908b22f277a1 https://oarep.usim.edu.my/bitstreams/5a4d840c-1384-4f63-b903-521bda17c087/download bc2a7118fa9749fe78906d191f155d0e https://oarep.usim.edu.my/bitstreams/7a624ffd-989e-4660-a4f3-d029d67244b5/download 982128fba53882c288a6f46b05102b26 https://oarep.usim.edu.my/bitstreams/b6abeef3-d1ce-44b7-a146-59a2597bb84c/download 01fb7838cf1b57cf777fb51e541712a2 https://oarep.usim.edu.my/bitstreams/6778b71b-cb66-4567-b0c7-62a4014059f6/download 31e47e27424af1221ee2161783d39448 https://oarep.usim.edu.my/bitstreams/21c1bea7-23cd-4480-aa4a-533a626ef817/download b2040d3ccd0533ec103ece62039c1272 https://oarep.usim.edu.my/bitstreams/2b85f0d7-c641-405a-a576-393d942d73d6/download f2c91894eb9034567c14751ba77fca1c https://oarep.usim.edu.my/bitstreams/f3f8f199-987f-4739-b26e-877a3d075bcc/download 6dd80d28cefce9786ac7bf369d69cd9e https://oarep.usim.edu.my/bitstreams/9478f889-2570-4821-94b1-a063d850d7f2/download 63ba858e13edf80f531cbbabc8382a2e https://oarep.usim.edu.my/bitstreams/653a944f-6f76-41a6-8ddb-dca984d1e751/download 55ceb990f2c9e1ee81f2907e3d07be7d https://oarep.usim.edu.my/bitstreams/3fcd0630-d3c2-4963-a8fa-19eb9ccc1e12/download 9590467d89ae388e120d1b46d747a6a4 https://oarep.usim.edu.my/bitstreams/a3b7b144-c3c0-43e5-a8bf-01d40734a1ff/download 114f7211c873107045bf99832bfc4ade https://oarep.usim.edu.my/bitstreams/9a56441e-91c0-4873-8a5b-44a169bf32ea/download 68b329da9893e34099c7d8ad5cb9c940 https://oarep.usim.edu.my/bitstreams/da32152e-4a7d-4e10-8246-726fb872763c/download 63373a9a8c2aa6b59ff53400edcf0bce Corporate governance and Islamic financial institutions Corporate governance -- Malaysia -- Case studies Takaful firms and industry |