Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia

Small- and medium-sized enterprises (SMEs) do not gain sufficient economic returns despite their significant economic contributions. A possible cause of poor SME performance is weak corporate governance. However, the corporate governance of SMEs is rarely investigated. Ownership structure provides S...

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Main Authors:	Takiah Mohd Iskandar, Nor Hazwani Hassan, Zuraidah Mohd Sanusi, Zakiah Muhammadun Mohamed
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2017
Online Access:	http://journalarticle.ukm.my/11301/ http://journalarticle.ukm.my/11301/ http://journalarticle.ukm.my/11301/1/15171-60319-1-PB.pdf

id	ukm-11301
recordtype	eprints
spelling	ukm-113012018-01-24T13:38:08Z http://journalarticle.ukm.my/11301/ Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia Takiah Mohd Iskandar, Nor Hazwani Hassan, Zuraidah Mohd Sanusi, Zakiah Muhammadun Mohamed, Small- and medium-sized enterprises (SMEs) do not gain sufficient economic returns despite their significant economic contributions. A possible cause of poor SME performance is weak corporate governance. However, the corporate governance of SMEs is rarely investigated. Ownership structure provides SMEs with a monitoring mechanism that enhances performance. This study examines the relationships between board characteristics (including size, composition boards, CEO duality, expertise, and ethnicity) and SME performance in Malaysia. This study also explores how such relationships can be moderated by monitoring ownership structure. Survey results on SMEs in Klang Valley and Selangor areas show that non-executive boards and CEO duality are significantly and positively related to firm performance. In comparison, management ownership is significantly and negatively related to performance. Board size, expertise, ethnicity, and family ownership are not significantly related to SME performance. Findings indicate that good corporate governance improves decision making and firm performance. Furthermore, agency theory can explain conflict of interest in SMEs and the importance of corporate governance in enhancing their performance. Penerbit Universiti Kebangsaan Malaysia 2017 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/11301/1/15171-60319-1-PB.pdf Takiah Mohd Iskandar, and Nor Hazwani Hassan, and Zuraidah Mohd Sanusi, and Zakiah Muhammadun Mohamed, (2017) Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia. Jurnal Pengurusan, 49 . pp. 25-39. ISSN 0127-2713 http://ejournal.ukm.my/pengurusan/issue/view/975
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	Small- and medium-sized enterprises (SMEs) do not gain sufficient economic returns despite their significant economic contributions. A possible cause of poor SME performance is weak corporate governance. However, the corporate governance of SMEs is rarely investigated. Ownership structure provides SMEs with a monitoring mechanism that enhances performance. This study examines the relationships between board characteristics (including size, composition boards, CEO duality, expertise, and ethnicity) and SME performance in Malaysia. This study also explores how such relationships can be moderated by monitoring ownership structure. Survey results on SMEs in Klang Valley and Selangor areas show that non-executive boards and CEO duality are significantly and positively related to firm performance. In comparison, management ownership is significantly and negatively related to performance. Board size, expertise, ethnicity, and family ownership are not significantly related to SME performance. Findings indicate that good corporate governance improves decision making and firm performance. Furthermore, agency theory can explain conflict of interest in SMEs and the importance of corporate governance in enhancing their performance.
format	Article
author	Takiah Mohd Iskandar, Nor Hazwani Hassan, Zuraidah Mohd Sanusi, Zakiah Muhammadun Mohamed,
spellingShingle	Takiah Mohd Iskandar, Nor Hazwani Hassan, Zuraidah Mohd Sanusi, Zakiah Muhammadun Mohamed, Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia
author_facet	Takiah Mohd Iskandar, Nor Hazwani Hassan, Zuraidah Mohd Sanusi, Zakiah Muhammadun Mohamed,
author_sort	Takiah Mohd Iskandar,
title	Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia
title_short	Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia
title_full	Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia
title_fullStr	Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia
title_full_unstemmed	Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia
title_sort	board of directors and ownership structure: a study on small and medium enterprises (smes) in malaysia
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2017
url	http://journalarticle.ukm.my/11301/ http://journalarticle.ukm.my/11301/ http://journalarticle.ukm.my/11301/1/15171-60319-1-PB.pdf
first_indexed	2023-09-18T19:59:57Z
last_indexed	2023-09-18T19:59:57Z
_version_	1777406781257940992

Board of Directors and ownership structure: a study on small and medium enterprises (SMEs) in Malaysia

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