The joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of Malaysian listed companies

The financial crises over the past two decades revealed severe shortcomings in corporate governance (CG) mechanisms and corporate social responsibility (CSR) practices globally. Malaysia also suffered the same fate when many organizations experienced weak compliance of CG codes and CSR practices. Gi...

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Main Author:	Karim, Sitara
Format:	Thesis
Language:	eng eng eng eng
Published:	2020
Subjects:	HD58.9 Organizational Effectiveness. HF5001-6182 Business
Online Access:	https://etd.uum.edu.my/10330/1/permission%20to%20deposit-not%20allow-903181.pdf https://etd.uum.edu.my/10330/2/s903181_01.pdf https://etd.uum.edu.my/10330/3/s903181_02.pdf https://etd.uum.edu.my/10330/4/s903181_references.docx
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spelling	my-uum-etd.103302023-03-01T04:17:15Z The joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of Malaysian listed companies 2020 Karim, Sitara Abdul Manab, Norlida Ismail, Rusmawati School of Economics, Finance & Banking School of Economics, Finance and Banking HD58.9 Organizational Effectiveness. HF5001-6182 Business The financial crises over the past two decades revealed severe shortcomings in corporate governance (CG) mechanisms and corporate social responsibility (CSR) practices globally. Malaysia also suffered the same fate when many organizations experienced weak compliance of CG codes and CSR practices. Given this condition, this study investigated the joint impact of CG mechanisms and CSR practices on the performance of Malaysian listed companies representing 5501 firm-year observations for the period 2006-2017. Furthermore, this study examined the moderating effect of board characteristics on the relationship between CG-CSR and performance relationship. Dynamic panel regressions were utilized assuming that CG-CSR and performance relationships are encountered with dynamic endogeneity and reverse causality; thus, system-GMM provides efficient solutions for such econometric problems. The findings reveal that CG and CSR, mainly, have value destroying impacts on firm performance such that CEO duality, directors’ remunerations, RMC independence, board diversity, environment, community, and workplace practices of CSR negatively and significantly affect firm performance consistent with agency theory predictions and agency cost argument. Contrarily, RMC size, RMC meetings, and marketplace practices of CSR positively determine firm performance parallel with resource dependence theory and the risk management perspective of CSR. Moreover, firm size positively, and leverage negatively affect firm performance. Additionally, ownership structure variables, CEO remuneration, board size, board independence, and money spent on CSR do not affect performance. Besides, an insignificant moderating effect of board characteristics is observed on the CG-CSR and performance relationship. Not with standing sound theoretical support, practically, the findings imply that despite continuous amendments in the Malaysian Code of Corporate Governance (MCCG), an effective monitoring mechanism is required to assess the compliance of the Code and CSR framework provided by the Securities Commission Malaysia and Bursa Malaysia. Thus, Malaysian listed companies should ensure compliance with the Code and CSR framework to attain better performance. 2020 Thesis https://etd.uum.edu.my/10330/ https://etd.uum.edu.my/10330/1/permission%20to%20deposit-not%20allow-903181.pdf text eng staffonly https://etd.uum.edu.my/10330/2/s903181_01.pdf text eng 2023-11-03 staffonly https://etd.uum.edu.my/10330/3/s903181_02.pdf text eng staffonly https://etd.uum.edu.my/10330/4/s903181_references.docx text eng staffonly other doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng eng eng
advisor	Abdul Manab, Norlida Ismail, Rusmawati
topic	HD58.9 Organizational Effectiveness. HF5001-6182 Business
spellingShingle	HD58.9 Organizational Effectiveness. HF5001-6182 Business Karim, Sitara The joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of Malaysian listed companies
description	The financial crises over the past two decades revealed severe shortcomings in corporate governance (CG) mechanisms and corporate social responsibility (CSR) practices globally. Malaysia also suffered the same fate when many organizations experienced weak compliance of CG codes and CSR practices. Given this condition, this study investigated the joint impact of CG mechanisms and CSR practices on the performance of Malaysian listed companies representing 5501 firm-year observations for the period 2006-2017. Furthermore, this study examined the moderating effect of board characteristics on the relationship between CG-CSR and performance relationship. Dynamic panel regressions were utilized assuming that CG-CSR and performance relationships are encountered with dynamic endogeneity and reverse causality; thus, system-GMM provides efficient solutions for such econometric problems. The findings reveal that CG and CSR, mainly, have value destroying impacts on firm performance such that CEO duality, directors’ remunerations, RMC independence, board diversity, environment, community, and workplace practices of CSR negatively and significantly affect firm performance consistent with agency theory predictions and agency cost argument. Contrarily, RMC size, RMC meetings, and marketplace practices of CSR positively determine firm performance parallel with resource dependence theory and the risk management perspective of CSR. Moreover, firm size positively, and leverage negatively affect firm performance. Additionally, ownership structure variables, CEO remuneration, board size, board independence, and money spent on CSR do not affect performance. Besides, an insignificant moderating effect of board characteristics is observed on the CG-CSR and performance relationship. Not with standing sound theoretical support, practically, the findings imply that despite continuous amendments in the Malaysian Code of Corporate Governance (MCCG), an effective monitoring mechanism is required to assess the compliance of the Code and CSR framework provided by the Securities Commission Malaysia and Bursa Malaysia. Thus, Malaysian listed companies should ensure compliance with the Code and CSR framework to attain better performance.
format	Thesis
qualification_name	other
qualification_level	Doctorate
author	Karim, Sitara
author_facet	Karim, Sitara
author_sort	Karim, Sitara
title	The joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of Malaysian listed companies
title_short	The joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of Malaysian listed companies
title_full	The joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of Malaysian listed companies
title_fullStr	The joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of Malaysian listed companies
title_full_unstemmed	The joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of Malaysian listed companies
title_sort	joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of malaysian listed companies
granting_institution	Universiti Utara Malaysia
granting_department	School of Economics, Finance & Banking
publishDate	2020
url	https://etd.uum.edu.my/10330/1/permission%20to%20deposit-not%20allow-903181.pdf https://etd.uum.edu.my/10330/2/s903181_01.pdf https://etd.uum.edu.my/10330/3/s903181_02.pdf https://etd.uum.edu.my/10330/4/s903181_references.docx
_version_	1776103792635281408

The joint impact of corporate governance mechanisms and corporate social responsibility practices on the performance of Malaysian listed companies

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