Asian Academy of Management Journal, Vol. 22, No. 2, 53–95, 2017 ETHICAL COMMITMENTS AND FINANCIAL PERFORMANCE: EVIDENCE FROM PUBLICLY LISTED COMPANIES IN MALAYSIA Ahmad Firdhauz Zainul Abidin, Hafiza Aishah Hashim*, and Akmalia Mohamad Ariff School of Maritime Business and Management, Universiti Malaysia Terengganu, Terengganu, Malaysia *Corresponding author:
[email protected] Published online: 29 December 2017 To cite this article: Abidin, A.F.Z., Hashim, H.A., and Ariff, A.M. (2017). Ethical commitments and financial performance: Evidence from publicly listed companies in Malaysia. Asian Academy of Management Journal, 22(2), 53–95. https://doi.org/10.21315/ aamj2017.22.2.3 To link to this article: https://doi.org/10.21315/aamj2017.22.2.3 ABSTRACT This study explores the role of business ethics towards corporate wealth creation and sustainable performance. In the context of Malaysia, the importance of committing to following the highest ethical standards is evidenced by the recommendations and guidelines imposed through the Malaysian Code of Corporate Governance (MCCG) 2012. The perspective from stakeholder theory indicates that commitment towards ethics has multiple, positive impacts to companies. One of the positive impacts, which is a result of being able to gain trust and secure loyalty from their stakeholders, is better financial performance. This study posits that management commitment towards ethics is positively associated with financial performance. Content analysis is used to systematically code and evaluate data from 243 publicly listed firms on the Main Board of Bursa Malaysia in year 2014. The Ethics Commitment Assessments Index (ECAI), which contains 14 items, is used to score commitment towards ethics.