Emerging from financial distress status : the role of corporate governance

The main objective of this study is to examine the role of corporate governance variables on emerging financially distress companies in Malaysia. This study has selected the sample from listed companies of Main and ACE market using classification of Practice Note 4 (PN4) or Practice Note 17 (PN17) and Guidance Note (GN3) respectively in Bursa Malaysia. This study also attempted to highlight the theories of corporate governance that closely related to the Malaysian listed firms. The period of study is 13 years (2001 - 2013). Logistic regressions have been conducted and three models have developed to test the relationship between independent and dependent variables. The findings show that blockholders ownership and number of blockholders have an impact on emerging financially distressed companies. This analysis method can be applicable for those companies currently facing financial distress situation. Meanwhile, board size shows no significant relationship on emerging financially distressed
companies as this shows that board size doesn’t give an impact on emerging financially distressed companies.