Board Diversity in Financial Distress Companies in Malaysia

Authors

  • Nurain Johan Kolej Universiti Poly-Tech MARA
  • Nurisyal Muhamad Kolej Universiti Poly-Tech MARA
  • Wan Sallha Yusoff Universiti Malaysia Perlis

DOI:

https://doi.org/10.61688/ajpbs.v3i2.46

Keywords:

MCCG, PN17, Financial Distress, Board Diversity

Abstract

The declining financial performance is often associated with the weak function of the board’s role in the companies. The number of publicly listed companies categorised as Practice Note (PN17) by Bursa Malaysia shows an increase due to financial distress. This study examines the effectiveness of board diversity in financially distressed companies categorised as PN17 by Bursa Malaysia using content analysis of annual reports for five years as secondary data. The characteristics of board diversity include board professionalism and a politically connected board. In contrast, the proxy of financial distress will be measured using Altman Z Score for multiple regressions in evaluating financial performance ratios. Implementing the Malaysian Code of Corporate Governance (MCCG) in 2021 also assessed the effectiveness of board diversity and its interaction with financial distress. The findings from this study are expected to provide evidence that board diversity may have a significant relationship with
financially distressed companies. Overall, this study may assist investors, practitioners, and external regulators in monitoring the company by assessing the effectiveness of board diversity from being classified as a financially distressed company.

Downloads

Published

2022-12-29

How to Cite

Johan, N., Muhamad, N., & Yusoff, W. S. (2022). Board Diversity in Financial Distress Companies in Malaysia. The Asian Journal of Professional & Business Studies, 3(2). https://doi.org/10.61688/ajpbs.v3i2.46

Issue

Vol. 3 No. 2 (2022): [December] Post Pandemic Sustainability

Section

Full Paper Article

License

Copyright (c) 2022 The Asian Journal of Professional & Business Studies

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

For all articles published in AJPBS journals, copyright is retained by the authors. Articles are licensed under an open access Creative Commons CC BY 4.0 license, meaning that anyone may download and read the paper for free. In addition, the article may be reused and quoted provided that the original published version is cited. These conditions allow for maximum use and exposure of the work while ensuring that the authors receive proper credit.