Corporate Governance and Performance of Shariah-Compliant Companies

Handbook of Research on Theory and Practice of Global Islamic Finance (pp. 547-566). Pennsylvania: IGI Global., 2020

Posted: 20 May 2021

See all articles by Mustafa Hanefah

Mustafa Hanefah

Universiti Sains Islam Malaysia (USIM) - Faculty of Economics and Muamalat

Muhammad Iqmal Hisham Kamaruddin

Universiti Sains Islam Malaysia (USIM)

Rosnia Masruki

Universiti Sains Islam Malaysia

Date Written: 2020

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.

Keywords: Corporate Governance, Performance, Shariah-Compliance Companies

Suggested Citation

Hanefah, Mustafa and Kamaruddin, Muhammad Iqmal Hisham and Masruki, Rosnia, Corporate Governance and Performance of Shariah-Compliant Companies (2020). Handbook of Research on Theory and Practice of Global Islamic Finance (pp. 547-566). Pennsylvania: IGI Global., 2020, Available at SSRN: https://ssrn.com/abstract=3848270

Mustafa Hanefah

Universiti Sains Islam Malaysia (USIM) - Faculty of Economics and Muamalat

N.Sembilan
Malaysia

Muhammad Iqmal Hisham Kamaruddin (Contact Author)

Universiti Sains Islam Malaysia (USIM) ( email )

Bandar Baru Nilai
Nilai, 71800
Malaysia

Rosnia Masruki

Universiti Sains Islam Malaysia ( email )

Bandar Baru Nilai
Nilai, 71800
Malaysia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
53
PlumX Metrics