BOARD OF DIRECTORS EFFECTIVENESS CHALLENGE: AN INTROSPECTIVE ON THE GOVERNMENT LINK COMPANIES EXPERIENCE

Abstract

The Board of directors represents the essential pillar in the corporate governance system. The Board of directors exerts significant influence in corporate control through the control, service, and strategic roles. This article aims to identify factors that influence the effective function of the corporate boards based on the government link companies (GLCs) experience in Malaysia. This study utilizes an unobtrusive method, which employs publicly available secondary data. The data are obtained from the online publications hit through the keywords of the entity’s name. Two entities, which sparked controversies in Malaysia during the period of mid-2018 until early 2019 are referred to as the observed case for this study. The content analysis on the materials capture a few themes of challenges comprised of (1) patrimonialism within board structure; (2) appointment of individuals of non-expert; (3) exaggerate practices of cross-directorship among GLCs board; (4) dominance influence of chairman onboard activities; and (5) vague board decision-making process. The originality of this study lies in the process that optimizes the strength of the qualitative method to comprehend corporate governance challenges by incorporating a true scenario.