Strong Governance Key to Investor Confidence and Sustainable Growth in Malaysia

Malaysia needs to bolster its governance practices, fiscal accountability, and leadership discipline to enhance investor confidence and secure sustainable economic growth amid a complex global economic landscape. Financial and governance expert Dr. Abdul Ahad Mohd. Salleh emphasized that the nation's new growth phase hinges not only on economic policies, investment, or innovation, but also on robust governance systems that support decision-making and build institutional trust.

Dr. Abdul Ahad stated that governance should transcend mere compliance and reporting requirements, serving instead as the foundation for responsible leadership. "Strong governance builds trust, improves decision-making quality, and creates the discipline needed to ensure long-term organizational resilience," he said in a statement. With over 27 years of global experience in finance, management, and strategic leadership, including a CFO role at a government-linked company (GLC), he noted that the finance function must evolve from reporting to driving value creation and strategic governance.

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Strong governance builds trust, improves decision-making quality, and creates the discipline needed to ensure long-term organizational resilience.

His doctoral research, which examined corporate tax avoidance practices among Malaysian public listed companies from 2021 to 2023, involved 663 company-year observations. The study found that profitability, leverage, and board size are key factors influencing tax avoidance. It also indicated that management ownership strengthens the link between specific governance mechanisms and tax avoidance practices, including board size, female board representation, and director remuneration.

Dr. Abdul Ahad explained that effective governance is achieved when leadership, ownership, and accountability align. "When organizations make decisions more transparently and with discipline, the impact not only improves organizational performance but also strengthens investor confidence, enhances fiscal responsibility, and fosters public trust in the economy," he asserted. He added that institutional confidence is built not just through policies, but through the quality of daily decisions in budgeting, tax governance, procurement, internal controls, performance measurement, and long-term value creation.

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When organizations make decisions more transparently and with discipline, the impact not only improves organizational performance but also strengthens investor confidence, enhances fiscal responsibility, and fosters public trust in the economy.