0312711
Corporate Governance and Board of Directors
Increase of public awareness regarding corporate governance has increased since well
publicize governance failure with Enron and WorldCom corporate scandals (Adams and
Hermalin et al., 2008). Good corporate governance constitutes characteristic such as
transparency, protection and enforceability of rights of its stakeholders. The board of
directors aligns the interest of management and its stakeholders where they oversee the
overall management performance and its integrity, contributing to strategy decisions and
replacing management when it is necessary (Maassen, 1999). This paper begins with a brief
introductory regarding what constitutes good corporate governance, followed by the roles of
its board of directors and to what extend do the board of directors have influence over
strategy making in a corporation. Evaluation of the different composition of board members
in United States and Malaysia will be made in order to view the possible differences and
similarities between compositions of board members of the two countries.
According to London Stock Exchange governance report (2012), in order to achieve
good corporate governance, it is important to establish a board that has the appropriate
