Corporate governance and going concern problems: evidence from Malaysia

Takiah Mohd Iskandar, Mohd Mohid Rahmat, Norazura Mohd Noor, Norman Mohd Saleh and Muhammad Jahangir Ali

International Journal of Corporate Governance, 2011, vol. 2, issue 2, 119-139

Abstract: We examine the relationship between board of directors' good governance characteristics and going concern problems of 56 companies listed on Bursa Malaysia in 2004 with going concern problems and 56 companies without going concern problems. Characteristics of corporate governance included in this study are composition of independent directors, CEO duality, management equity ownership, and institutional investor equity ownership. The use of going concern audit opinion to measure the company financial performance enhances the accuracy of measurements previously employed. Findings indicate that the practice of CEO duality may impair the independence of board of directors. Results suggest that equity ownerships by the management and institutional investors form internal and external mechanisms respectively to improve the company financial performance.

Keywords: management; equity ownership; institutional investors; going concerns; financial performance; CEO duality; Bursa Malaysia; company boards; directors; stock exchanges; independent directors; board composition; equities; audit opinion; performance measurement; independence impairment; financial problems; internal mechanisms; external mechanisms; corporate governance. (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (4)

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