The aim of this study is to explore the effect of independent directors on dividend policy among manufacturing listed companies in Malaysia. The panel data of this study was obtained from Datastream of manufacturing listed companies within the FTSE Bursa Malaysia Top 100 index over the period of 2012-2021. For this purpose, a sample of 29 companies was selected using the census method. The firm’s panel was analyzed using descriptive statistics and Pooled Ordinary Least Square (OLS). Fixed effects technique was chosen to investigate the influence of board independence on dividend policy, proxied with dividend yield and dividend per share (Market-Based Measure). Descriptive analysis presented that on average, companies’ independent directors were 48% of the board size which does not meet the 50% requirement number of independent directors as stated in the Malaysian Code on Corporate Governance 2021. In addition, the finding also shows that board independence and dividend policy is significantly and negatively related. Therefore, manufacturing companies can advocate for higher dividends by limiting a number of board independence.
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