APPOINTMENT AND PERFORMANCE ENHANCEMENT OF INDEPENDENT DIRECTORS IN MALAYSIA

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Abstract

The objective of the study is to gauge the perception of directors in Malaysia on the appointment of independent non-executive directors and the mechanism needed in enhancing their role. A qualitative research design using a face-to-face interview is chosen in this study as it is a valuable tool in understanding the directors’ opinion on the appointment and performance enhancement of independent non-executive directors in Malaysia. The directors interviewed reveal that independence, experience, knowledge of the firm, and contacts are determinants of having independent nonexecutive directors on the board. On the other hand, training programmes, access to information, preparation for meetings, being in committees and effective performance evaluation are necessary factors in enhancing the performance of independent non-executive directors. Due to the lack of published materials in this area in Malaysia, this study will therefore contribute to the existing knowledge on the appointment and performance enhancement of independent non-executive directors. Understanding how independent non-executive directors are chosen and the mechanisms in enhancing their performance is crucial because who gets selected will, in turn, affect the roles they play and how effectively they can play such roles.

Keywords: independent non-executive directors, appointment, performance evaluation, enhancing performance of non-executive directors

How to cite this paper: Rahman, R. A. (2007). Appointment and performance enhancement of independent directors in Malaysia. Corporate Board: role, duties and composition, 3(1), 11-17. https://doi.org/10.22495/cbv3i1art2