Gender, ethnic and age diversity of the boards of large Malaysian firms and performance

Board diversity is important especially in countries which practice a one-tier board system, such as Malaysia. Under the system, board appointments are usually controlled by the firm’s substantial shareholders, and as a result, directors are chosen based on “the old-boy” network or “people like us...

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Main Authors:	Shamsul Nahar Abdullah, Ku Nor Izah Ku Ismail
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2013
Online Access:	http://journalarticle.ukm.my/6968/ http://journalarticle.ukm.my/6968/ http://journalarticle.ukm.my/6968/1/4609-10780-1-SM.pdf

id	ukm-6968
recordtype	eprints
spelling	ukm-69682016-12-14T06:42:44Z http://journalarticle.ukm.my/6968/ Gender, ethnic and age diversity of the boards of large Malaysian firms and performance Shamsul Nahar Abdullah, Ku Nor Izah Ku Ismail, Board diversity is important especially in countries which practice a one-tier board system, such as Malaysia. Under the system, board appointments are usually controlled by the firm’s substantial shareholders, and as a result, directors are chosen based on “the old-boy” network or “people like us”, who are typically middle-aged males and from similar ethnicity which could lead to “group think”. Board diversity ensures breadth and depth of the board’s judgments. To this end, this study examines board diversity of the top 100 non-financial Malaysian firms, specifically directors’ gender,ethnicity and age and their effects on firm performance. Data are collected from the 2007 annual reports of the sample firms. The evidence indicates the lack of diversity of the Malaysian boards of directors. Results from the multivariate analyses reveal that gender diversity is negatively associated with Tobin’s q and ROA. Age diversity is found to be negatively related to ROA. Ethnic diversity, on the other hand, is found to be positively associated with ROA. Hence, findings on the effect of board diversity and firm performance are mixed. Nevertheless, this study offers insights to policy makers in enhancing corporate governance in Malaysia where diversity is one of the areas that could strengthen the effectiveness of the board. Penerbit Universiti Kebangsaan Malaysia 2013 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/6968/1/4609-10780-1-SM.pdf Shamsul Nahar Abdullah, and Ku Nor Izah Ku Ismail, (2013) Gender, ethnic and age diversity of the boards of large Malaysian firms and performance. Jurnal Pengurusan, 38 . pp. 27-40. ISSN 0127-2713 http://ejournal.ukm.my/pengurusan/index
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	Board diversity is important especially in countries which practice a one-tier board system, such as Malaysia. Under the system, board appointments are usually controlled by the firm’s substantial shareholders, and as a result, directors are chosen based on “the old-boy” network or “people like us”, who are typically middle-aged males and from similar ethnicity which could lead to “group think”. Board diversity ensures breadth and depth of the board’s judgments. To this end, this study examines board diversity of the top 100 non-financial Malaysian firms, specifically directors’ gender,ethnicity and age and their effects on firm performance. Data are collected from the 2007 annual reports of the sample firms. The evidence indicates the lack of diversity of the Malaysian boards of directors. Results from the multivariate analyses reveal that gender diversity is negatively associated with Tobin’s q and ROA. Age diversity is found to be negatively related to ROA. Ethnic diversity, on the other hand, is found to be positively associated with ROA. Hence, findings on the effect of board diversity and firm performance are mixed. Nevertheless, this study offers insights to policy makers in enhancing corporate governance in Malaysia where diversity is one of the areas that could strengthen the effectiveness of the board.
format	Article
author	Shamsul Nahar Abdullah, Ku Nor Izah Ku Ismail,
spellingShingle	Shamsul Nahar Abdullah, Ku Nor Izah Ku Ismail, Gender, ethnic and age diversity of the boards of large Malaysian firms and performance
author_facet	Shamsul Nahar Abdullah, Ku Nor Izah Ku Ismail,
author_sort	Shamsul Nahar Abdullah,
title	Gender, ethnic and age diversity of the boards of large Malaysian firms and performance
title_short	Gender, ethnic and age diversity of the boards of large Malaysian firms and performance
title_full	Gender, ethnic and age diversity of the boards of large Malaysian firms and performance
title_fullStr	Gender, ethnic and age diversity of the boards of large Malaysian firms and performance
title_full_unstemmed	Gender, ethnic and age diversity of the boards of large Malaysian firms and performance
title_sort	gender, ethnic and age diversity of the boards of large malaysian firms and performance
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2013
url	http://journalarticle.ukm.my/6968/ http://journalarticle.ukm.my/6968/ http://journalarticle.ukm.my/6968/1/4609-10780-1-SM.pdf
first_indexed	2023-09-18T19:48:24Z
last_indexed	2023-09-18T19:48:24Z
_version_	1777406055140032512

Gender, ethnic and age diversity of the boards of large Malaysian firms and performance

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