Good Governance Practices and Employee Integrity: Evidence from Local Government

Abstract

Good governance is necessary to enable companies to operate more efficiently, improve access to capital, mitigate risk and safeguard stakeholders. Good governing practices will lead employees to behave with integrity. Currently, governance in the public and private sectors has been exposed to public criticism due to governance failure, fraud, corruption, bribery, and internal control. Thus, the main focus of this study is to determine the significant influence between good governance which comprised of fraud control, risk management, infrastructure and facilities, and quality performance and employee integrity. Besides that, this study also determines the level of good governance practices among employees. For this research, the researcher employed a quantitative method. For data collection, the survey method was used by constructing a self-administered questionnaire to collect data. The questionnaires were distributed among the employees of a local government office in a northern state of Malaysia and only 140 of the data were usable for analysis. The data analysis employed reliability test, Cronbach alpha, mean level, and regression analysis. The finding reveals that a significant influence exists between risk management and infrastructure facilities with employee integrity. However, the result indicates that there is no significant influence between fraud control and quality performance with employee integrity. Furthermore, it was also found that the level of good governance practices among employees is only moderately high. Therefore, in achieving a developed country status, Malaysia needs to strategize its approach to increase the level of good governance among local and public sectors.