Determinants of Firm Performance and the Impact of the COVID-19 Pandemic on PN17 and GN3 Companies in Malaysia

Determining the best metrics and indicators to assess company performance during the COVID-19 pandemic is challenging, as businesses faced an unprecedented set of uncertainties due to the crisis. This study aims to examine the factors influencing firms' financial performance both before (2018 and 2019) and during (2020 and 2021) the pandemic, with a focus on financially distressed companies, specifically those listed under Practice Note 17 (PN17) and Guidance Note 3 (GN3) regulations during these periods. In line with the United Nations' Sustainable Development Goal (SDG) 5 on gender equality and women's empowerment, this research also explores the role of gender diversity by analysing the impact of the Bursa Malaysia recommendation, which requires the inclusion of 30% female directors on public-listed companies’ board. Additionally, this study investigates key determinants of financial performance, including liquidity efficiency, financial leverage, operational efficiency, management competency, and board size. The findings indicate that the regression coefficients for all tested variables are not significant across both the pre-pandemic and pandemic periods. This suggests that the COVID-19 pandemic did not significantly impact the financial performance of PN17 and GN3 companies. This research extends the application of agency theory to the context of PN17 and GN3 companies in Malaysia. The results emphasis the need for heightened awareness among top management, particularly the board of directors, to improve the performance of these distressed companies. These insights could inform policymakers in designing effective policies to help companies survive COVID-19-related challenges and develop strategies to mitigate the effects of potential future crises.