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PurposeThis study seeks to examine the influence of board independence, CEO duality and ownership structure on the firm financial distressed status using a sample of distressed companies and a matched‐pair sample of non‐distressed companies listed on the Bursa Malaysia.Design/methodology/approachThis study utilized publicly available data from annual reports of a sample of 86 non‐finance distressed firms listed on the Bursa Malaysia and a sample of matched 86 non‐distressed firms for a period covering the 1999‐2001 financial years.FindingsBoard independence and CEO duality are not associated with financial distressed status. Management and non‐executive directors' interests are associated negatively with financial distress. A negative association is also documented for outside blockholders. The evidence also supports the contention that ownership by non‐executive directors and outside blockholders effectively increases their incentives to monitor management in ensuring their wealth in the firms is intact.Research limitations/implicationsOne limitation of this research is that it relies on publicly available data and agency theory. Future research could apply other theories, such as resource dependency and stewardship. Use of process‐oriented data could also improve the findings.Practical implicationsIndependent directors need to undergo training to help them improve and be aware of their responsibilities.Originality/valueThis paper offers evidence on the extent to which distress is associated with corporate governance from a developing country. The paper should be of interest to the regulatory bodies and practitioners.

PurposeThe purpose of this study is to investigate the extent to which firm's performance, the structure of the board of directors and ownership determine directors' remuneration in Malaysia among distressed firms.Design/methodology/approachThe study uses publicly available data from a sample of 86 distressed firms and matched 86 non‐distressed firms for 2001 financial year.FindingsThe findings for the full sample show that directors' remuneration is not associated with firm's profitability, as measured by ROA. A negative and significant association is observed between directors' remuneration and lagged ROA. With regard to corporate governance, board independence and the extent of non‐executive directors' interests are found to have negative influence on directors' remuneration. In addition, findings also reveal directors' remuneration is positively associated with firm's growth and size. In sub‐sample analyses, a strong negative relation is observed between ROA and directors' remuneration for healthy sub‐sample.Research limitations/implicationsFuture research on this area could examine period after the adoption of the Malaysian Code by the Bursa Malaysia in 2001. Further, interviews with directors and managers about the need to link remuneration and performance could be carried out.Practical implicationsThere is a need for companies to link remuneration with performance, which this paper found to be lacking in practice.Originality/valueThe contribution of this paper is its examination of directors' remuneration among distressed firms. Findings of this paper would be useful to both regulatory bodies and practitioners.

This study investigates the roles of board independence and CEO duality on a firm's performance relying on financial ratios, namely ROA, ROE, EPS and profit margin. This paper argues that if boards and leadership structure are well in place and conform to the practices in other developed countries, the long‐term shareholder value is expected to increase and shareholder interests are also well protected. To test the roles of board independence and CEO duality, data from the KLSE Main Board companies for the 1994‐1996 financial years were used. The 1994‐1996 financial years were chosen because, during this period, the issue of corporate governance in Malaysia was not as prominent as it was during, and after, the 1997/1998 financial crisis. Thus, this period could be considered as the period during which guidelines on the structure of the board of directors were not yet available in Malaysia. The findings, generally, suggest that neither board independence, leadership structure nor the joint effects of these two showed any relations with firm performance. Findings of this study, nonetheless, showed that Malaysian companies' boards were generally dominated by outside directors and the majority of the companies in the study practiced non‐dual leadership structures. Thus, this evidence suggests that the structure of the boards of directors in Malaysia is largely independent of management and the absence of any dominant personality.