Corporate governance and bank performance: evidence from eight commercial bank in Malaysia / Nur Hanin Azhan

A firm that has a good corporate governance policy will tend to have a good performance as it is also known as the potential growth of the firm in terms of their efficiency and their operations. One of the biggest failures in corporate governance can be seen after the financial crisis on 1997 where Malaysia is heavily affected by that crisis. Banks is one of the sectors that are highly regulated and acts as an intermediary with the government as well as to contribute in increasing the economy of Malaysia. The issue arose in this research when the banks applied different corporate governance policies with non-banking firms and most of the previous research does not specific on the commercial bank that is listed in the Bursa Malaysia. Thus, this study will investigate the impact of corporate governance on commercial banks performance in Malaysia, by identifying the most significant variables towards the performance of financial firms and best method to improve bank performance. The data selected for this research is from eight commercial banks that are being listed in Bursa Malaysia. This study will analyze on the eight commercial banks within ten years' time frame that contribute to 160 observations. Moreover, the dependent variables in this study are Return on Assets (ROA) as the performance of the bank while the independent variables are board size, independence director, board diversity, board meeting, and age of director and education qualifications as the internal corporate governance factors and a panel data is used in this research. Furthermore, the expected result for this study is that only board size that has a positive relationship with the performance of the bank in Malaysia. To conclude, this corporate governance policy are very important in the banking industry since it will affects the economy of the country as well.