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Are there barriers to independent non-executive directors' effectiveness in performing their roles?

Purpose – The purpose of this paper is to ascertain whether non-executive directors (NEDs) in Malaysian public listed companies (PLCs) may be facing certain barriers in the performance of their roles. Design/methodology/approach – A qualitative approach, consisting of a series of interviews with...

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Main Author: Annuar, Hairul Azlan
Format: Article
Language:English
Published: Emerald 2012
Subjects:
HF5601 Accounting. Bookkeeping
Online Access:http://irep.iium.edu.my/27749/1/Hairul_-_IJCM_-_Barriers_of_INEDs.pdf
http://irep.iium.edu.my/27749/
http://www.emeraldinsight.com/journals.htm?articleid=17065601
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spelling my.iium.irep.277492015-10-15T08:35:06Z http://irep.iium.edu.my/27749/ Are there barriers to independent non-executive directors' effectiveness in performing their roles? Annuar, Hairul Azlan HF5601 Accounting. Bookkeeping Purpose – The purpose of this paper is to ascertain whether non-executive directors (NEDs) in Malaysian public listed companies (PLCs) may be facing certain barriers in the performance of their roles. Design/methodology/approach – A qualitative approach, consisting of a series of interviews with board members, was chosen. The sampling frame was made as large as possible and for the purpose of this study, consisted of board members who sit on the main board of Malaysian-owned PLCs. Findings – The interviews revealed that a majority of the interviewees perceived that the barriers were either non-existent or at least manageable. There were indications however that NEDs in small firms might face some of the problems suggested. The culture effect may also mediate their effectiveness in performing their roles. When there are barriers present, the most difficult problem faced by the NEDs concern time available to spend with the company. Research limitations/implications – This research utilized interviews. Generalizations may be an issue when interviews are used as the method of inquiry. Also, the sample is not random, as access to many directors depended on recommendations. In addition, respondents were consciously selected in order to obtain various board positions that include independent and non-independent directors. Practical implications – Findings from this research suggest that investors should not be overly concerned with their investments in Malaysian PLCs, as the NEDs are able to strongly discharge their responsibilities in overseeing executives’ conduct and protecting investors’ interest. The NEDs did not appear to face problems and hostilities from their host companies and it would be an added benefit to everyone concerned if they were able to more properly manage their time. Originality/value – There is a lack of work on studying barriers to NEDs’ effectiveness in developing countries, as previous work and literature reviews have been predominantly based upon the experience of Western economies. Emerald 2012 Article REM application/pdf en http://irep.iium.edu.my/27749/1/Hairul_-_IJCM_-_Barriers_of_INEDs.pdf Annuar, Hairul Azlan (2012) Are there barriers to independent non-executive directors' effectiveness in performing their roles? International Journal of Commerce and Management, 22 (4). pp. 258-271. ISSN 1056-9219 http://www.emeraldinsight.com/journals.htm?articleid=17065601 10.1108/10569211211284476
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HF5601 Accounting. Bookkeeping
spellingShingle HF5601 Accounting. Bookkeeping
Annuar, Hairul Azlan
Are there barriers to independent non-executive directors' effectiveness in performing their roles?
description Purpose – The purpose of this paper is to ascertain whether non-executive directors (NEDs) in Malaysian public listed companies (PLCs) may be facing certain barriers in the performance of their roles. Design/methodology/approach – A qualitative approach, consisting of a series of interviews with board members, was chosen. The sampling frame was made as large as possible and for the purpose of this study, consisted of board members who sit on the main board of Malaysian-owned PLCs. Findings – The interviews revealed that a majority of the interviewees perceived that the barriers were either non-existent or at least manageable. There were indications however that NEDs in small firms might face some of the problems suggested. The culture effect may also mediate their effectiveness in performing their roles. When there are barriers present, the most difficult problem faced by the NEDs concern time available to spend with the company. Research limitations/implications – This research utilized interviews. Generalizations may be an issue when interviews are used as the method of inquiry. Also, the sample is not random, as access to many directors depended on recommendations. In addition, respondents were consciously selected in order to obtain various board positions that include independent and non-independent directors. Practical implications – Findings from this research suggest that investors should not be overly concerned with their investments in Malaysian PLCs, as the NEDs are able to strongly discharge their responsibilities in overseeing executives’ conduct and protecting investors’ interest. The NEDs did not appear to face problems and hostilities from their host companies and it would be an added benefit to everyone concerned if they were able to more properly manage their time. Originality/value – There is a lack of work on studying barriers to NEDs’ effectiveness in developing countries, as previous work and literature reviews have been predominantly based upon the experience of Western economies.
format Article
author Annuar, Hairul Azlan
author_facet Annuar, Hairul Azlan
author_sort Annuar, Hairul Azlan
title Are there barriers to independent non-executive directors' effectiveness in performing their roles?
title_short Are there barriers to independent non-executive directors' effectiveness in performing their roles?
title_full Are there barriers to independent non-executive directors' effectiveness in performing their roles?
title_fullStr Are there barriers to independent non-executive directors' effectiveness in performing their roles?
title_full_unstemmed Are there barriers to independent non-executive directors' effectiveness in performing their roles?
title_sort are there barriers to independent non-executive directors' effectiveness in performing their roles?
publisher Emerald
publishDate 2012
url http://irep.iium.edu.my/27749/1/Hairul_-_IJCM_-_Barriers_of_INEDs.pdf
http://irep.iium.edu.my/27749/
http://www.emeraldinsight.com/journals.htm?articleid=17065601
_version_ 1643609387519967232
score 13.211869

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