This study aims to investigate the impact of corporate governance mechanisms on firm performance among Malaysian family controlled businesses listed on main market of Bursa Malaysia for the year 2015. In addition, the study also examines the level of firm performance among Malaysian family controlled businesses. In this study family controlled businesses is defined as those in which multiple members of the same family are directly involved in the businesses as major owners or managers. Corporate governance mechanisms have been suggested by many academicians and corporate governance experts to be one of the tools that can help family controlled businesses improve their governance quality as well as financial performance. Corporate mechanisms such as CEO tenure, board independence, board size, and managerial ownership are expected to improve firm performance which is measured by return of asset (ROA). The study also included control variables namely firm size and firm leverage. The study has chosen 154 family controlled businesses out of total 319 family controlled businesses listed on Bursa Malaysia that have financial year end 31 December 2015. Data in relation to corporate governance mechanisms, ROA and control variables are obtained from individual family controlled businesses’ annual reports. This study used descriptive analysis and correlation analysis to examine the relationship between the corporate mechanisms and control variable with firm performance. This study found that the level of performance of family controlled businesses in Malaysia is considered low. All the corporate governance mechanisms CEO tenure, board independence, board size, managerial ownership, and firm size have no significant relationship with performance of family controlled businesses. While, for control variables, only firm leverage is negatively and significantly related to family controlled businesses’ performance. The results of the study suggested that future research about corporate governance mechanisms should adopt a holistic view of the agency problems to which family controlled businesses are exposed and analyze the repercussions of each mechanism on other agency problems beyond the one they were originally designed to solve. It is hope that this study can enrich the literature specifically relating to family controlled businesses in Malaysia, and creates greater awareness for regulators, academicians, investors and the public that family controlled businesses and non-family controlled businesses share a slightly different corporate governance practices in businesses. This will also help policy-makers to draw up effective guidelines or codes that are, at the same time, accommodating of the unique features of family controlled businesses.
