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Barriers to Independent Non-Executive Directors’ Effectiveness in Performing Their Roles

Annuar, Hairul Azlan (2010) Barriers to Independent Non-Executive Directors’ Effectiveness in Performing Their Roles. In: 2nd International Conference on Arab-Malaysian Islamic Global Business and Entrepreneurship, 20 - 24 March 2010, Yarmouk, Jordan and Damascus, Syria. (Unpublished)

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Purpose – The overall purpose of the research presented is to ascertain whether independent non-executive directors (INEDs) in Malaysian public listed companies (PLCs) may be facing certain barriers in the performance of their roles. The findings may provide helpful insights to Arab businessmen who wish to do business in Malaysia, notably with PLCs, as they may depend upon local INEDs to protect their investments and to act on their behalf. The absence of barriers to the performance of INEDs’ role may provide these businessmen with the confidence and added assurance to invest safely and profitably in Malaysia. Design/methodology/approach – A qualitative approach, consisting of a series of interviews with board members, was chosen. The sampling frame was made as large as possible and for the purpose of this study, consisted of board members who sit on publicly listed companies (PLCs) of the main board and Malaysian-owned. Findings – The interviews revealed that a majority of the interviewees perceived that the barriers were either non-existent or at the least manageable. There were indications however that INEDs in small firms might face some of the problems suggested. The culture effect may also mediate their effectiveness in performing their roles. When there are barriers present, the most difficult problem faced by the INEDs concern time available to spend with the company. Research limitations – This research utilised interviews. Generalisations may be an issue when interviews are used as the method of inquiry. Also, the sample is not random as access to many directors depended on recommendations. In addition, respondents were consciously selected in order to obtain various board positions that include independent and non-independent directors. Originality/value – There is a lack of work on studying barriers to INEDs effectiveness in developing countries, whereby previous work and literature review were predominantly based upon the experience of Western economies.

Item Type: Conference or Workshop Item (Full Paper)
Additional Information: 3997/23657
Uncontrolled Keywords: Corporate governance, Independent non-executive directors, effectiveness, interview, public listed companies, Malaysia
Subjects: H Social Sciences > HF Commerce > HF5001 Business. Business Administration > HF5601 Accounting. Bookkeeping
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Kulliyyah of Economics and Management Sciences > Department of Accounting
Depositing User: Dr Hairul Azlan Bin Annuar
Date Deposited: 02 Jan 2013 17:16
Last Modified: 14 Feb 2013 03:21
URI: http://irep.iium.edu.my/id/eprint/23657

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