An effective interest alignment mechanism or a tool to expropriate: A review of Malaysian ESOS adoption

Employee Shares Option Scheme (ESOS) is theorised as a solution to bridge the interest of managers with owners of the firms particularly in setting where ownership is widely held.Modern corporations in developing countries are characterised by controlling shareholders who are also actively involved in the management of firms.The resultant conflict of interests between the majority and the minority shareholders questions the suitability of ESOS in aligning their interests towards the firm’s common goal.Findings from the study suggest that the usual determinants of ESOS adoption in the West do not hold in the environment of high ownership concentration.The post-adoption performance has not improved and there is no significant difference between the adopting and the non-adopting firms after controlling for size and industry.Nonetheless, there is evidence of better performance for adopting firms in terms of profitability albeit very weak in magnitude

Disclosing compliant and responsible corporations: CSR performance in Malaysian CEO statements

In Malaysia, corporate social responsibility (CSR) is relatively new but corporations are required to engage in and disclose CSR. CSR reports are a common register for disclosure and their CEO Statements provide an overview of CSR performance in these reports. This article studies how language features in Malaysian CEO Statements disclose CSR performance. A corpus containing 27 CEO Statements from 2009 to 2011 from 10 Malaysian corporations was analyzed. The analysis was grounded in critical discourse analysis (CDA), which employed Social Actors and ATTITUDE from Systemic Functional Linguistics (SFL) and interviews with corporate representatives to understand the ideology of CEO Statements. The analysis proposes three strategies of categorization, evaluation and chronology to disclose CSR performance because performance is oriented to four categories (community, environment, marketplace, workplace) and a positive evaluation, which are centered on the past. The disclosure reflects the ideology of CEO Statements, which promotes corporations as agents of positive social change. Through CEO Statements, corporations disclose compliance to the government and stock exchange and responsibility to their other stakeholders. CSR disclosure in CEO Statements helps to strengthen economic legitimacy through social legitimacy. This study is useful for people practicing and teaching corporate communication because it encourages them to consider the meaning implied by language features (evaluative and non-evaluative lexis, modifiers, tenses and prepositional phrases, besides exact numbers) in corporate registers. Yet, the corpus was limited to 27 CEO Statements and future research should expand the corpus to represent CEO Statements from other years, countries and languages

Consumers’ perception on Islamic home financing: empirical evidences on Bai Bithaman Ajil (BBA) and diminishing partnership (DP) in Malaysia

The Bai Bithaman Ajil (BBA) or Deferred Installment Sales facility is the most predominant mode of home financing in Malaysia since the introduction of Islamic banking in 1983. It is based on the debt financing where the bank buys the property from the customer and sells it back to the customer inclusive of profit. Customers make repayments at end of each month. This research examines the impact of using the prevailing debt concept which is claimed to have caused high price, customers‟ dissatisfaction, injustice and criticism by international scholars. In order to address these issues an alternative concept known as Musharakah Mutanaqisah or the Diminishing Partnership (DP) is also examined. In DP, bank and customers purchase the house jointly. The bank leases the house to the customers and rental payments are shared between them based on profit sharing ratio. The customer redeems the bank‟s share on monthly basis until full settlement after which the house is transferred to the customer. The study investigates the perceptions of customers between BBA and DP home financing products. A survey questionnaire was conducted on 300 owners and potential house owners to gauge their features and operations. The result of paired t–test indicated significant differences between these two products. DP home financing is a viable alternative to BBA home financing measured from the descriptive results and hypothesis testing. The actual implementation of DP is a challenge for the banks and requires a paradigm shift from their present role as traditional financiers

Diminishing partnership home financing concept as an alternative to Bai Bithaman Ajil (BBA): empirical evidences from the perceptions of Shariah scholars and bankers

Meera and Abdul Razak (2005) suggested that the Diminishing Partnership (DP) Home Financing concept can be a viable alternative to Bai Bithaman Ajil (BBA) Home Financing. They argued that DP concept can address issues faced by BBA which is still the main financing mode of Islamic financial institutions to date. The major issues that have arisen are related to the concepts used, methods of computation, pricing based on interest rate benchmark, Shariah compliant, justice and societal well being. On the other hand, the DP concept is claimed to be free from the above mentioned shortcomings and said to be in line with the spirit of Islam, which promotes risk sharing and its pricing based on rental is considered to be just and fair. As these issues requires in depth understanding of the Shariah parameter as well and banking operations, semi-structured interviews were conducted with six Shariah scholars and six bankers to seek their opinions and viewpoints on the variables investigated. The Shariah scholars generally agreed that DP concept possess greater justice, equity and follows the true spirit of Islam. Contrary to expectation, the overall views of the bankers support the implementation of DP, although there were a few reservations regarding its operations. The actual implementation of DP is a challenge for bankers which require a paradigm shift from their present role as traditional financiers. Key words: Islamic home financing, Bai Bithaman Ajil (BBA), Diminishing Partnership (DP), Shariah scholars, Bankers and Shariah compliant

Malaysia and UNCED: an analysis of a diplomatic process; 1989-1992

This thesis is a political and diplomatic analysis of a United Nations special conference - the United Nations Conference on the Environment and Development (UNCED) which took place over a period of two and a half years from 1989 to 1992. It examines the process and substance of the UNCED negotiations as seen through the role played by Malaysia. It shows how Malaysia, a small, developing country, strives to influence events at the United Nations. A number of issues have been selected as negotiation case-studies. They include forests, biological diversity, climate change and the cross-sectoral issues of finance and technology transfer. The thesis examines the motives of nation-states in resolving these environmental problems and analyses the unprecedented role of non state actors which took an active part in UNCED process. Finally ,the thesis analyses the results of UNCED and attempts to predict its future as seen through the newly created Commission on Sustainable Development

Factors influencing intention to use diminishing partnership home financing

Abstract Purpose – The purpose of this study is to examine the acceptance level of a new Islamic home financing concept, diminishing partnership (DP), by consumers in Malaysia using the theory of reasoned action as the guiding principle. Design/methodology/approach – Cross sectional data were collected through a survey and analysed by means of factor analysis, correlation and regression analysis. Findings – Positive attitude or degree of favorableness towards the DP concept and religious and social influence are jointly responsible in determining the intention to engage in DP though the former commands greater influence. Research limitations/implications – The use of convenience sampling and postgraduate students may not sufficiently capture the variations that could potentially exist in the market. Practical implications – Introducing a leading Islamic finance product requires more than just a mere Shariah Board approval as customers are far more critical than has often been assumed. Demand for the home diminishing product has clearly been substantiated. It is a challenge for bankers to devise products that use the spirit of the concept very closely without compromising its salient features. Marketing strategies to consumers with different religious backgrounds have also been identified. Originality/value – This study examines customers’ acceptance level of a new Islamic home financing concept among multi ethnic/religion consumers with growing interest and consciousness about Islamic financial products

Consumers' acceptance on Islamic home financing : empirical evidence on Bai Bithaman Ajil(BBA) in Malaysia.

Bai Bithamall Ajil (BBA) is the most predominant mode of home financing in Malaysia since the introduction ofIslamic banking in 1983. The BBA is a deferred installment sale where bank capitalizes on its profit up front in the sale of property. The concept is similar to debt financing which is often resulted in high cost.The BBA as practiced in Malaysia is seen not to be in compliant with the Shariah principle as the bank does not take the risk of ownership and liability of the property. Given the controversial features of the BBA, it is anticipated that there was high level of dissatisfaction among the present and potential BBA customers, including Muslims and the NonMuslims. Based on a survey of 300 owners and potential house owners, there was high level of dissatisfaction among customers, as evidenced by their low intention to use the BBA. Muslim customers in general are concerned about the features ofBBA notably its compliance with Shariah as well as its inability to fulfill the broad objective ofjustice, equality and societal well being. The Non-Muslim customers however, seem to have greater beliefs in BBA and its ability to fulfill socially desirable objectives. The discontent feelings signal the urgent need by the bankers to come up with altematives of Islamic home financing product. lvfusharakah Aflltallaqisah or the Diminishing Partnership concept has been proposed to replace BBA for its esteemed feature

Consumers’ acceptance on Islamic home financing: empirical evidence on Bai Bithaman Ajil (BBA) in Malaysia

Bai Bithaman Ajil (BBA) is the most predominant mode of home financing in Malaysia since the introduction of Islamic banking in 1983. BBA is a deferred installment sale where bank capitalizes its profit up front in the sale of property. The concept is similar to debt financing which is often resulted in high cost. BBA as practiced in Malaysia is seen not to be in compliant with the Shariah principle as the bank does not take the risk of ownership and liability on the property. Given the controversial features of BBA, it is anticipated that there is high level of dissatisfaction among the present and potential BBA customers including Muslim and the Non-Muslim. Based on a survey of 300 owners and potential house owners, there is high level of dissatisfaction among the customers as evidenced by their low intention to use BBA Muslim customers in general are concerned about the features of BBA notably its compliance with Shariah as well as its inability to fulfill the broad objective of justice, equality and societal well being. The Non-Muslim customers however seem to have greater beliefs in BBA and its ability to fulfill socially desirable objectives. The discontent feelings signal the urgent need by the bankers to come up with alternatives of Islamic home financing product. Musharakah Mutanaqisah or the Diminishing Partnership concept has been proposed to replace BBA for its esteemed features

The Performance Measures of Islamic Banking Based on the Maqasid Framework

It has been taken for granted that Islamic banking (IB) is only about avoiding riba. The objectives of Islamic banking have not been formally addressed. As such, the present conventional performance yardsticks being used by IB have focused largely on financial measures. Hence there is a need for developing other performance measures that would complement the financial objectives of IB. This paper therefore proposes the objectives of IB from the theory of Maqasid al-Shari’ah and, derives a model of IB performance measures based on these objectives. A behavioral approach operationalization method (Sekaran, 2000) is used to quantify the Maqasid into measurable IB performance indicators that are later used for testing on a sample of six Islamic banks. The banks are evaluated and ranked at three levels based on their: 1) performance ratios, 2) performance indicators and 3) the overall Maqasid Index. Key words: Maqasid al-Shari’ah, Operationalization,., Simple Additive Weighting (SAW) Maqasid Index

An effective interests alignment mechanism or a tool to expropriate: A review of Malaysian ESOS adoption

ESOS is theorised as a solution to bridge the interest of managers with owners of the firms particularly in setting where ownership is widely held. Modern corporations in developing countries are characterised by controlling shareholders who are also actively involve in the management of the firms. The resultant conflict of interests between majority and minority shareholders questions the suitability of ESOS in aligning their interests towards firms’ common goal. Findings from the study suggest that the usual determinants of ESOS adoption in the West do not hold in the environment of high ownership concentration. The post-adoption performance has not improved and there is no significant difference between adopting and non-adopting firms after controlling for size and industry. Nonetheless, there is evidence of better performance for adopting firms in terms of profitability albeit very weak in magnitude