The Asian financial crisis that happened in the year 1997 had become one of the paramount issue connected to the development of Malaysian corporate governance. For instance, there are several initiatives that being taken by Malaysian government to strengthen the board composition and structure in order to create better dynamic board decision-making process which will lead to better firm’s performance as well as to help to create a good value creation towards company’s shareholders. The preliminary results of this study reveal most of Malaysian companies have complied with the recommendation of the MCCG (2000) and MCCG (2007) Code to have an effective of board structure. The main focus of conducting this study is to contribute to new and additional knowledge as well as emerging interest in the Malaysian boards by examining the board characteristics and the improvement of an effective board of directors within the Malaysian PLCSs under the agency theory by the collection of data for the financial year ended 31 December 2015 for the 200 companies located in Malaysia. However, outcome derived from this study shows that board characteristics namely, board size, board independence, director’s age, female director and the number of board members with MBA Degree/PhD level education was found to be negatively related with firm’s financial performance that being measured by return on asset (ROA) as the financial performance indicator. It can be concluded that although various corporate governance reform has been undertaking in Malaysia since year 2000, the reform has not much effect on financial performance. Despite that, it is envisaged that finding of this study will helps to determine the relevant board characteristics needed by board composition within the Malaysian PLCs, that are significant to the company, board of director and the management, the academician of body knowledge and the researcher as well as the policy maker or government authorities.
