Moderation effect of CEO choice on the relationship between corporate governance and family firm performance

Moderation effect of CEO choice on the relationship between corporate governance and family firm performance

Mandatory imposition of Malaysian Code of Corporate Governance (MCCG) since 31st December 2012 seems to be associated with serious endeavours done by the regulators and policy makers to enhance the stakeholder’s value for public listed companies in Bursa Malaysia. Besides establishing the code that...

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Main Author: lbrahim, Md Noh
Format: Thesis
Language:eng
eng
Published: 2015
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HD2709-2930.7 Corporations
Online Access:https://etd.uum.edu.my/5310/1/s93136.pdf
https://etd.uum.edu.my/5310/2/s93136_abstract.pdf
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institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Lode, Nor Asma
topic HD2709-2930.7 Corporations
spellingShingle HD2709-2930.7 Corporations
lbrahim, Md Noh
Moderation effect of CEO choice on the relationship between corporate governance and family firm performance
description Mandatory imposition of Malaysian Code of Corporate Governance (MCCG) since 31st December 2012 seems to be associated with serious endeavours done by the regulators and policy makers to enhance the stakeholder’s value for public listed companies in Bursa Malaysia. Besides establishing the code that involved independent non-executive directors, the world’s trend for choosing outsiders as CEOs becomes familiar amongst family controlled-firms (FCFs) in Malaysia. In terms of shareholder and stewardship theories, this latest trend frequently happens in FCF with opportunity for expropriation due to the highly persuasive cash flow rights. The failure of Minority Shareholder Watchdog Group’s (MSWG) roles in establishing stakeholder theory motivates this study to investigate the moderation effects of CEO choice on corporate governance and FCF performance relationship by using ROA, EVA, and Tobin’s Q with the application of signalling theory. FCF population for the financial year of 2010 and 2011 were consecutively rated accordingly using the MCCG index scores issued by MSWG in 2009. The study reveals that CEO choice has moderating positive effects towards the board of directors’ structure and FCF’s performance relationship that are significant to Tobin’s Q model. After further analysis, it was found that the positive effect comes from insider CEOs. Inevitably, the transformation of negative magnitude seems to have a synergic impact which combining both CEOs of FCF as a new trend for its corporate value and investors’ wealth. Eventually, the present study suggests the regulators and policy makers to reconsider specific governance codes for FCF in order to lessen the dominance of agency theory
format Thesis
qualification_name Doctor of Business Administration (DBA)
qualification_level Doctorate
author lbrahim, Md Noh
author_facet lbrahim, Md Noh
author_sort lbrahim, Md Noh
title Moderation effect of CEO choice on the relationship between corporate governance and family firm performance
title_short Moderation effect of CEO choice on the relationship between corporate governance and family firm performance
title_full Moderation effect of CEO choice on the relationship between corporate governance and family firm performance
title_fullStr Moderation effect of CEO choice on the relationship between corporate governance and family firm performance
title_full_unstemmed Moderation effect of CEO choice on the relationship between corporate governance and family firm performance
title_sort moderation effect of ceo choice on the relationship between corporate governance and family firm performance
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2015
url https://etd.uum.edu.my/5310/1/s93136.pdf
https://etd.uum.edu.my/5310/2/s93136_abstract.pdf
_version_ 1747827905606451200
spelling my-uum-etd.53102021-03-18T08:34:47Z Moderation effect of CEO choice on the relationship between corporate governance and family firm performance 2015 lbrahim, Md Noh Lode, Nor Asma Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HD2709-2930.7 Corporations Mandatory imposition of Malaysian Code of Corporate Governance (MCCG) since 31st December 2012 seems to be associated with serious endeavours done by the regulators and policy makers to enhance the stakeholder’s value for public listed companies in Bursa Malaysia. Besides establishing the code that involved independent non-executive directors, the world’s trend for choosing outsiders as CEOs becomes familiar amongst family controlled-firms (FCFs) in Malaysia. In terms of shareholder and stewardship theories, this latest trend frequently happens in FCF with opportunity for expropriation due to the highly persuasive cash flow rights. The failure of Minority Shareholder Watchdog Group’s (MSWG) roles in establishing stakeholder theory motivates this study to investigate the moderation effects of CEO choice on corporate governance and FCF performance relationship by using ROA, EVA, and Tobin’s Q with the application of signalling theory. FCF population for the financial year of 2010 and 2011 were consecutively rated accordingly using the MCCG index scores issued by MSWG in 2009. The study reveals that CEO choice has moderating positive effects towards the board of directors’ structure and FCF’s performance relationship that are significant to Tobin’s Q model. After further analysis, it was found that the positive effect comes from insider CEOs. Inevitably, the transformation of negative magnitude seems to have a synergic impact which combining both CEOs of FCF as a new trend for its corporate value and investors’ wealth. Eventually, the present study suggests the regulators and policy makers to reconsider specific governance codes for FCF in order to lessen the dominance of agency theory 2015 Thesis https://etd.uum.edu.my/5310/ https://etd.uum.edu.my/5310/1/s93136.pdf text eng public https://etd.uum.edu.my/5310/2/s93136_abstract.pdf text eng public dba dba Universiti Utara Malaysia Abdullah, S. N. (2004). Board composition, CEO duality and performance among Malaysian listed companies. Corporate Governance, 4(4), 47-61. Abdullah, S. N. (2006).Director’s remuneration, firm’s performance and corporate governance in Malaysia among distressed companies. Corporate Governance, 6(2), 162-174. Abdullah, W.W.Z., Ismail, S., and Jamaluddin, N. (2008). The impact of board composition, ownership and CEO duality on audit quality: The Malaysian evidence. Malaysian Accounting Review, 7(2), 17-28. Abdullah, S. N. & Valentine, B. (2009). Fundamental and ethics theories of corporate governance. 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