Can good boards lead to better firm's performance: Evidence from public listed companies in main Board Bursa Malaysia

Corporate Governance (CG) has its own code of best practices that should be comply by every listed company in the world. This study will give more understanding of why company should comply with the code of CG where the finding reveal that exist an association between CG compliance on board of directors (BOD) facets with firm’s performance. For the purpose of collecting information on the BOD, this study used the companies’ annual reports in year 2004 until 2006 for 163 listed companies in main board Bursa Malaysia Securities Berhad. Annual reports are sufficient for gathering such data considering listed companies must abide to Securities Exchange Commission’s requirement of such disclosure whereas the data for the firm’s performance was gathered from Thompson DataStream. The individual facets of BOD that are of interest to us are as follows: (i) BOD communication; (ii) BOD education and training and (iii) composition of independent directors. Evidently, the company with good CG compliance can maximize the shareholders wealth by maximizing their market value.