Abstract:

This study is motivated by the current debate on the lack of qualified directors on the corporate boards of government-linked companies (GLCs) in Malaysia, which is believed to have caused these companies to perform relatively poorly. Accordingly, we examine whether GLCs have significantly less board industry expertise relative to non-GLCs. Using 27 matched-pairs of GLCs and non-GLCs listed on Bursa Malaysia from 2010 through 2017, we find that GLCs have a significantly lower proportion of industry expert directors compared to non-GLCs. The findings of this study provide empirical support for the concern on the deficiency of qualified directors on the corporate boards of Malaysian GLCs.