The Impact of Corporate Governance Practices on Firms' Financial Performance: Evidence from Malaysian Companies‪.‬

I. Introduction The East Asian financial crisis of 1997-98 demonstrated the importance of effective corporate governance in developing countries (Krugman 1994; Radelet and Sachs 1998; Rasiah 1999). Malaysia was adversely affected by this financial crisis. The contraction of the Malaysian economy, along with instability in the exchange rate and a marked decline in share prices, adversely affected the corporate sector. This resulted in considerable retrenchment and downsizing of operations, and the closure of many firms.