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International Journal of Economics and Management, Volume 12, Issue 1, 2018, pp. 339-356

Does busyness of directors matter in reputable firms?

Abstract :

This paper investigates how the degree of busyness and reputation of firm affect the relationship between multiple directorships and corporate performance in Malaysia. Using a sample of listed entities excluding financial sector in the main market of Bursa Malaysia in 2009 till 2015, this paper finds many public companies have board members who hold multiple directorships; the companies that embrace multiple directorships perform better financially than companies without multiple directorships. However, it is detrimental if majority of these board members hold higher than two directorships. Nonetheless, the reputational effect of firm will alleviate the negative effect of busyness. The empirical results are also valuable to regulators in judging the relevant number of appointments for individual directors.

Keywords : Busyness,Corporate performance,Firm reputation,Multiple directorships
Subject Area : Business and International Management Economics, Econometrics and Finance(all) Strategy and Management

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