Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia

This study examines whether Shari’ah approved companies with majority Muslim directors adopt better corporate governance (CG) than non-Shari’ah approved companies with majority non-Muslim directors and whether the performance of the former is better than that of the latter. The objective of this...

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Main Authors:	Mohamad Ibrahim, Shahul Hameed, A.H, Fatima, Htay, Sheila Nu Nu
Format:	Article
Language:	English
Published:	Emerald Group Publishing Limited 2006
Subjects:	HG1501 Banking
Online Access:	http://irep.iium.edu.my/29614/ http://irep.iium.edu.my/29614/ http://irep.iium.edu.my/29614/1/Bursa_Malaysia.pdf

id	iium-29614
recordtype	eprints
spelling	iium-296142013-03-26T08:22:56Z http://irep.iium.edu.my/29614/ Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia Mohamad Ibrahim, Shahul Hameed A.H, Fatima Htay, Sheila Nu Nu HG1501 Banking This study examines whether Shari’ah approved companies with majority Muslim directors adopt better corporate governance (CG) than non-Shari’ah approved companies with majority non-Muslim directors and whether the performance of the former is better than that of the latter. The objective of this study is to determine whether religious factor has an influence in adopting corporate governance mechanisms and in performance. Performance of the companies is measured in relation to three perspectives, namely, Shari’ah compliance, environmental performance, and social performance. This study used secondary data and the leading 50 firms were selected from each group based on their market capitalization for the year 2002. The proxies for good corporate governance are CEO non-duality, the proportion of non-executive directors on the board, and the proportion of independent non-executive directors on the board. The proxies used to measure Shari’ah compliance are the ratio of prohibited income to total income and the ratio of prohibited expenses to total expenses. The variables used to measure the environmental and social performance are certification of ISO 14001 and OHsas 18001, respectively. The results generally showed that there is little significant difference between the CG and performance of Shari’ah approved companies with majority Muslim directors and non-Shari’ah approved companies with majority non-Muslim directors, although the former is marginally better for both, in a few instances. Emerald Group Publishing Limited 2006 Article PeerReviewed application/pdf en http://irep.iium.edu.my/29614/1/Bursa_Malaysia.pdf Mohamad Ibrahim, Shahul Hameed and A.H, Fatima and Htay, Sheila Nu Nu (2006) Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia. Journal of Financial Reporting and Accounting, 4 (1). pp. 1-24. ISSN 1985-2517 http://www.emeraldinsight.com/journals.htm?articleid=1827138&show=html
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking
spellingShingle	HG1501 Banking Mohamad Ibrahim, Shahul Hameed A.H, Fatima Htay, Sheila Nu Nu Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia
description	This study examines whether Shari’ah approved companies with majority Muslim directors adopt better corporate governance (CG) than non-Shari’ah approved companies with majority non-Muslim directors and whether the performance of the former is better than that of the latter. The objective of this study is to determine whether religious factor has an influence in adopting corporate governance mechanisms and in performance. Performance of the companies is measured in relation to three perspectives, namely, Shari’ah compliance, environmental performance, and social performance. This study used secondary data and the leading 50 firms were selected from each group based on their market capitalization for the year 2002. The proxies for good corporate governance are CEO non-duality, the proportion of non-executive directors on the board, and the proportion of independent non-executive directors on the board. The proxies used to measure Shari’ah compliance are the ratio of prohibited income to total income and the ratio of prohibited expenses to total expenses. The variables used to measure the environmental and social performance are certification of ISO 14001 and OHsas 18001, respectively. The results generally showed that there is little significant difference between the CG and performance of Shari’ah approved companies with majority Muslim directors and non-Shari’ah approved companies with majority non-Muslim directors, although the former is marginally better for both, in a few instances.
format	Article
author	Mohamad Ibrahim, Shahul Hameed A.H, Fatima Htay, Sheila Nu Nu
author_facet	Mohamad Ibrahim, Shahul Hameed A.H, Fatima Htay, Sheila Nu Nu
author_sort	Mohamad Ibrahim, Shahul Hameed
title	Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia
title_short	Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia
title_full	Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia
title_fullStr	Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia
title_full_unstemmed	Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia
title_sort	corporate governance and performance: a comparative study of shari’ah approved and non-shari’ah approved companies on bursa malaysia
publisher	Emerald Group Publishing Limited
publishDate	2006
url	http://irep.iium.edu.my/29614/ http://irep.iium.edu.my/29614/ http://irep.iium.edu.my/29614/1/Bursa_Malaysia.pdf
first_indexed	2023-09-18T20:43:29Z
last_indexed	2023-09-18T20:43:29Z
_version_	1777409520682663936

Corporate governance and performance: a comparative study of Shari’ah approved and non-shari’ah approved companies on Bursa Malaysia

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