The impact of Board Size on the Performance of Shariah-Compliant Companies in Malaysia
Rosnia Masruki1, Mustafa Mohd Hanefah2, Mohd Marzuki Ismail3
1Rosnia Masruki, *, Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, Malaysia.
2Mustafa Mohd Hanefah, Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, Malaysia.
3Mohd Marzuki Ismail, Accountant General Department, Malaysia.

Manuscript received on November 20, 2019. | Revised Manuscript received on November 28, 2019. | Manuscript published on 30 November, 2019. | PP: 6709-6714 | Volume-8 Issue-4, November 2019. | Retrieval Number: D8209118419/2019©BEIESP | DOI: 10.35940/ijrte.D8209.118419

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Abstract: The objective of this study is to examine the relationship between the board size and firm performance of Shariah-Compliant companies in Malaysia. The characteristics of the board of Shariah-compliant companies in Consumer Products counter of Bursa Malaysia are being examined against the firm’s performance using data from 77 companies from year 2014 to 2016. Based on the result of regression, board size has a strong positive correlation with the performance of the firms. This study suggests that Shariah-Compliant Companies need to strengthen the Shariah governance to produce products that Muslim consumer use in their daily lives. The appointment of director with Shariah background must be highly encouraged if not mandatory to companies involved in producing food, drinks, pharmaceutical and cosmetics in order for the companies to tap their expertise in enhancing halal governance. The findings of the study would be very useful to the regulators to improve the Malaysian Code of Corporate Governance. Furthermore, the findings of the study also help to fill the gap on scarce of literatures that study the relationship between the corporate governance practices and performance.
Keywords: Islamic finance, Board Size, Financial Performance, Shariah-Compliant Companies.
Scope of the Article:  Measurement & Performance Analysis.