The Social Sciences

Year: 2016
Volume: 11
Issue: 30
Page No. 7314 - 7318

Nine Year Tenure as Independent Director: Overstaying the Welcome?

Authors : Muhammad Umar bin Abdul Razak, Mazlina Mahali and Yang Chik Adam

Abstract: An independent director is a person who appointed to the board of director and did not have any material pecuniary relationship or transactions with the company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associate that may affect the independent of the director. Initial studies concerning board structure focused on the number of independent directors on the board and while previous studies have tried to measure the actual independence. The potential impact of board tenure on board independence has not been adequately explored in academic literature and up until recently has escaped the public eye. The purpose of this study is to examine whether 9 year tenure as an independent directorship could affect independence on the board in Malaysian public companies. This research adopts qualitative types of research methodology where primary resources are the Malaysian Companies Act 1965, Malaysian Code of Corporate Governance and Bursa Malaysia listing requirements. The finding of this study is that there are several benefits from having long-serving independent directors hence, the 9 year tenure limit requirement is not followed by most of the Malaysian public companies where the tenure is prolonged for >9 year.

How to cite this article:

Muhammad Umar bin Abdul Razak, Mazlina Mahali and Yang Chik Adam, 2016. Nine Year Tenure as Independent Director: Overstaying the Welcome?. The Social Sciences, 11: 7314-7318.

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