Corporate Governance and Performance of Shariah-Compliant Companies

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Author(s): Mustafa Bin Mohd Hanefah (Universiti Sains Islam Malaysia, Malaysia), Muhammad Iqmal Hisham Kamaruddin (Universiti Sains Islam Malaysia, Malaysia), Rosnia Masruki (Universiti Sains Islam Malaysia, Malaysia)and Mohd Marzuki Ismail (Universiti Sains Islam Malaysia, Malaysia)
Copyright: 2020
Pages: 20
Source title: Handbook of Research on Theory and Practice of Global Islamic Finance
Source Author(s)/Editor(s): Abdul Rafay (University of Management and Technology, Pakistan)
DOI: 10.4018/978-1-7998-0218-1.ch029

Keywords: Accounting & Finance / Accounting and Finance / Business & Management / Business Science Reference

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Abstract

This chapter examines the relationship between corporate governance practices and firm performance. The characteristics of the board of Shari'ah-compliant companies in consumer products counter of Bursa Malaysia were examined against the firm's performance using data from 77 companies from 2014 to 2016. Based on the result of multiple regression; board size, Muslim chairman, and Muslim director have a weak positive correlation with the performance of the firms. However, directors with Shari'ah background seem to have a negative correlation with the performance of the firms. The findings of the chapter would be very useful to the regulators to improve the Malaysian Code of Corporate Governance (MCCG). The findings also help to fill the gap on scarce literature that study the relationship between the corporate governance practices involving Muslim characteristics and performance.

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Corporate Governance and Performance of Shariah-Compliant Companies

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