Staff View: Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh

Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh

Corporate failure involves the cessation of trading or activity of a business, which is generally preceded by financial distress. Poor corporate governance has been identified as one of the factors that contribute to corporate failure. As an effort to prevent corporate failures, corporate governance...

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Main Authors:	Mohamad, Azlinda, Darus, Faizah, Jusoh, Rohayati
Format:	Article
Language:	English
Published:	2011
Subjects:	HD Industries. Land use. Labor Corporations Corporate organization. Corporate governance Malaysia Organizational behavior. Corporate culture
Online Access:	https://ir.uitm.edu.my/id/eprint/31033/1/31033.pdf https://ir.uitm.edu.my/id/eprint/31033/ http://myjms.mohe.gov.my/index.php/tifej
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id	my.uitm.ir.31033
record_format	eprints
spelling	my.uitm.ir.310332022-05-11T06:16:40Z https://ir.uitm.edu.my/id/eprint/31033/ Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh Mohamad, Azlinda Darus, Faizah Jusoh, Rohayati HD Industries. Land use. Labor Corporations Corporate organization. Corporate governance Malaysia Organizational behavior. Corporate culture Corporate failure involves the cessation of trading or activity of a business, which is generally preceded by financial distress. Poor corporate governance has been identified as one of the factors that contribute to corporate failure. As an effort to prevent corporate failures, corporate governance reforms have been undertaken worldwide in an attempt to improve corporate governance. This is because a good governance structure would ensure that the roles and responsibilities of stakeholders and management would be well defined and strictly adhered to. This study aims to investigate the impact of corporate governance mechanisms on financially distressed companies which is proxied by PN4 and PN17 status (Practice Note 4 and Practice Note 17) of Malaysian public listed companies for a three year period from 1 January 2004 to 31 December 2006. In general, the aim of this study is to increase the understanding and to provide new empirical evidence of the impact of corporate governance attributes on the poor performance of companies in Malaysia and to test the robustness of the agency theory in the context of corporate governance. The research is concerned with three corporate governance mechanisms: board structure, ownership structure and internal control. The results of this study provide evidence that there is a significant negative association between CEO duality and financial distress condition. This implies that leadership structure affects the performance of companies. The findings suggest that CEO duality will reduce agency problem as the agent will act in his best interest since he can provide better strategic vision in the companies’ goals and objectives. Other governance and internal control mechanisms identified in the study were found to be insignificant. 2011 Article PeerReviewed text en https://ir.uitm.edu.my/id/eprint/31033/1/31033.pdf (2011) Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh. Terengganu International Finance and Economics Journal (TIFEJ), 1 (1). pp. 43-57. ISSN 2232-0539 http://myjms.mohe.gov.my/index.php/tifej
institution	Universiti Teknologi Mara
building	Tun Abdul Razak Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Teknologi Mara
content_source	UiTM Institutional Repository
url_provider	http://ir.uitm.edu.my/
language	English
topic	HD Industries. Land use. Labor Corporations Corporate organization. Corporate governance Malaysia Organizational behavior. Corporate culture
spellingShingle	HD Industries. Land use. Labor Corporations Corporate organization. Corporate governance Malaysia Organizational behavior. Corporate culture Mohamad, Azlinda Darus, Faizah Jusoh, Rohayati Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh
description	Corporate failure involves the cessation of trading or activity of a business, which is generally preceded by financial distress. Poor corporate governance has been identified as one of the factors that contribute to corporate failure. As an effort to prevent corporate failures, corporate governance reforms have been undertaken worldwide in an attempt to improve corporate governance. This is because a good governance structure would ensure that the roles and responsibilities of stakeholders and management would be well defined and strictly adhered to. This study aims to investigate the impact of corporate governance mechanisms on financially distressed companies which is proxied by PN4 and PN17 status (Practice Note 4 and Practice Note 17) of Malaysian public listed companies for a three year period from 1 January 2004 to 31 December 2006. In general, the aim of this study is to increase the understanding and to provide new empirical evidence of the impact of corporate governance attributes on the poor performance of companies in Malaysia and to test the robustness of the agency theory in the context of corporate governance. The research is concerned with three corporate governance mechanisms: board structure, ownership structure and internal control. The results of this study provide evidence that there is a significant negative association between CEO duality and financial distress condition. This implies that leadership structure affects the performance of companies. The findings suggest that CEO duality will reduce agency problem as the agent will act in his best interest since he can provide better strategic vision in the companies’ goals and objectives. Other governance and internal control mechanisms identified in the study were found to be insignificant.
format	Article
author	Mohamad, Azlinda Darus, Faizah Jusoh, Rohayati
author_facet	Mohamad, Azlinda Darus, Faizah Jusoh, Rohayati
author_sort	Mohamad, Azlinda
title	Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh
title_short	Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh
title_full	Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh
title_fullStr	Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh
title_full_unstemmed	Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh
title_sort	corporate governance and corporate failure in the context of agency theory / azlinda mohamad, faizah darus and rohayati jusoh
publishDate	2011
url	https://ir.uitm.edu.my/id/eprint/31033/1/31033.pdf https://ir.uitm.edu.my/id/eprint/31033/ http://myjms.mohe.gov.my/index.php/tifej
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score	13.211869

Corporate governance and corporate failure in the context of agency theory / Azlinda Mohamad, Faizah Darus and Rohayati Jusoh

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