The Effects of Board Composition on Malaysian Investors’ Confidence with Corporate Reputation as a Mediator

Sam, Pui Yoke (2024) The Effects of Board Composition on Malaysian Investors’ Confidence with Corporate Reputation as a Mediator. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

A comprehensive review of corporate governance practices in Malaysia, particularly the Malaysian Code on Corporate Governance (MCCG), illustrates how robust governance frameworks can restore and maintain investor confidence. The study examines notable cases of governance failure, such as the 1 Malaysia Development Berhad (1MDB) and Wirecard AG scandals, which highlight the critical importance of ethical conduct, transparency, and accountability within corporations. These cases underscore the need for effective governance mechanisms to prevent similar collapses and the resulting impact on investor trust. By analysing the mediating role of corporate reputation, the study provides insights into how board characteristics can influence investor confidence. The findings aim to inform business practitioners, investors, stakeholders, and academics on strategies for enhancing corporate governance practices and, consequently, investor confidence. With that, a quantitative research study is conducted through the collection of primary data via online survey questionnaires from 210 Malaysian investors engaged in stock market to satisfy the research questions and objectives. The findings exhibited that board composition would boost investors’ confidence through the mediating effect of corporate reputation. In addition, the results shown that all the hypothesis is supported. This study provides insight on how board composition could improve the investors’ confidence in Malaysia. Practically, it delivers the awareness for Malaysian companies to good corporate governance practices and serves as guideline for self-assessment