DISSERTATION PROPOSAL
Student Name : Student Number :
Degree Programme : BA (HONS) Accounting and Finance
Dissertation to be submitted :
Area of Dissertation :
Title : An analysis of the effectiveness of corporate governance by public listed
companies in Malaysia.
Introduction :
Realizing the important role and responsibility to the public, companies have taken the initiative step to be self regulate; and one of the approaches is to practice good corporate governance. The lax standards of Corporate Governance subsequently known as (CG) were reviewed and tightened into best practices among Public Listed Companies (plc) as the East Asian economic crisis in 1997/98. As a result, a series of initiatives focusing on the governance structures of companies and on the disclosures that need to be made protect shareholders and provide confidence that the stewardship of organizations are in good hands.
Since different cultures and approaches of Corporate Governance were adopted by different countries, Malaysian Institute of Corporate Governance subsequently known as (MICG) was therefore established, serve as the medium of CG to react on issues relating to management of the business and affairs of corporations in Malaysia; and to promote public awareness of CG in encouraging interaction among the members and the investing public CG issues. There are four main areas where the principles underlies in the report are board of directors, director’s remunerations, shareholders and accounting and audit ability.
The Malaysian Code on Corporate Governance subsequently known as (MCCG) is aimed at providing guidelines for companies to observe good CG in their business practices. MCCG is especially relevant to public listed companies that have a responsibility towards their shareholders to observe the highest standard of transparency, accountability and, above all, integrity. Bursa Malaysia Berhad has helped to play an important role in enhancing companies’ financial performance in accordance with MCCG such as the amendments made in revamp in listing requirements. It is aimed at strengthening provisions in disclosure, financial reporting and other continuing listing obligations.
Research Problem :
1) What are the factors affecting the compliance with Corporate Governance among
public listed companies in Malaysia?
2) What are the problems faced by these companies in practicing good corporate
governance?
3) What are the possible ways that can be used by these companies to overcome the
problems of corporate governance compliance?
Objective :
This research is attempted to study and identify the following :
1) the factors affecting the compliance of corporate governance and the importance of
corporate governance among public listed companies in Malaysia
2) the problems faced by these companies in practicing good corporate governance
3) the possible ways which can be adopted by these companies to solve the problems of
corporate governance.
Scope of Study :
This study will concentrate on the practice of good corporate governance framework in the business world where companies have to cope with the fast beat of corporate development faced by those companies in Malaysia. Although these framework are very important but it realized that companies have difficulties in adopting proper and good corporate governance. So the roles and functions of directors, the establishments of specialized bodies in governing the practice of good CG, and the impact derived from the principles are to be investigated.
Literature Review :
Based on Cafferty and Finn (2002) says that there are three criteria that need to be met in order to reduce the risk of fraud. The three criteria are good ethics, good people and lastly a good system. However, many analysts see this as a setback of the government’s corporate restructuring effort. Malaysia’s corporate governance appears to have gone two steps forward and one step back. Whether all the investors’ confidence that the market has rekindled in the past months is for real, we’ll have to wait and see until the new year.
However, the argument on Shleifer and Vishny (1997) states that the central problem of corporate governance is to insure that investors receive an adequate return on their investment in the firm. Whereas, as stated by Goktan (2005), the firm’s governance organization is to be mainly determined by its board size, its board composition, its management’s equity stake, its corporate charter/bylaws, and the state laws to which it is subject.
Besides, Chester (2006) stated that, poor governance can at times be associated with higher returns through excessive, nontransparent risk taking by fund managers; although, with a proper risk-adjustment, fund performance could be lower. Based on Deakin (2002), the fall of Enron has again focused attention on the failure of mechanisms of corporate governance to protect investor interests. However, financial scandals of this kind are nothing new, particularly in periods of ‘correction’ following stock market bubbles. Moreover, there is no consensus on the wider implications of the Enron affair. Three distinct positions might be taken.
Research method :
This research will engage mutually the qualitative and also quantitative evaluation. Thus, the secondary data will involved for additional understanding the nature of the research topic and also related topic. The research focal point generally is more on secondary data compared to primary data. Secondary data is data where usually researchers will not need to collect their own data but can test the hypothesis by using the data that already exist. The challenge with secondary data is to assure yourself that the data appropriately address your research question such that you are not caught in a dilemma of altering your hypothesis to fit the data. All of these secondary date collected was used to justify and support any claim made on the research issue to make it more presentable and reliable on the claim topic. There two methods used to obtain the secondary data which are online and manual methods. The manual methods will be such as magazines, newspaper, company’s Annual Reports, Malaysian Code on Corporate Governance, the reports on stock market, the reports on Corporate Governance, Securities Commission reporting, book and etc.
Since the factors affecting the compliance with corporate governance, the problems faced by companies and the possi
Timetable : Oct – Chapter 1 Introduction
Nov – Chapter 2 Literature Review
Dec – Chapter 3 Research Methodology
Please tick the most appropriate subject area for your dissertation.
- Accounting and Finance
Signature of Student : Dated :
Please hand this form into the Faculty Office and you will be allocated a supervisor.
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Proposed Dissertation Supervisor :
Credit:ivythesis.typepad.com
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