Abstract:
The global financial crises in 2007-2008 has badly affected the Malaysian economy as
evidenced by the 670 points fall in the Bursa Malaysia index which was 45% of its total
value and the biggest decline after the Asian Financial Crisis 1997. The Asian Round
Table on Corporate Governance advised to improve the governance structure and
overcome the weaknesses exposed by the crisis in Asian countries including Malaysia.
The Securities Commission Malaysia issued Corporate Governance Blueprint document
in July 2011 for improving governance structure of the country which facilitated the
introduction of the new code of the Malaysian Code on Corporate Governance (MCCG)
in March 2012. A weak governance structure may provide an opportunity for managers
to engage in activities that would result in a lower quality of reported earnings.
