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THE IMPACT OF BOARD GENDER DIVERSITY ON SUSTAINABILITY PERFORMANCE IN MALAYSIAN FIRMS: THE ROLE OF TOP EXECUTIVE GENDER

Maali Kachouri and Rakia Riguen

Article

The purpose of this paper is to argue the relationship between the sustainability performance, the top executive gender, and the board gender diversity. This study examines the moderates’ effect of top executive gender on the relation between the board gender diversity and the sustainability performance. The study uses ordinary least squares regression (OLS) to investigate the relation between the board gender diversity, the sustainability performance and the top executive of a sample of 78 Malaysian firms over the 2010–2019 period. The results obtained show that, for the Malaysian companies, a higher percentage of female in the board is positively associated with the performance sustainability in firms with a higher percentage of women in top management team. The findings may be of interest to the academic researchers, investors, regulators and professional accounting bodies as it shows that legislative reforms in regulating the composition of their boards. For this reason, firms have to increase women‘s percentage in their boards of directors. The results also give useful information to investors in examining the interaction between the board gender diversity, the sustainability performance and the women executives. Our results proved empirically that gender diversity positively related to sustainability performance. The findings show that firms with gender-diversified boards are more likely to get involved in sustainability. In addition, firm well advised to apply the policy encouraging or mandating women as board members in order to take advantage of their expected benefits. To the author’s knowledge, no research studies found that empirically examined the interaction between the board gender diversity, the sustainability performance and the women in top management team. Therefore, unlike prior studies that have been examining the relation between gender diversity and sustainability performance, this study went further to investigate the interception between this variable by the integrations of the role of women executives. This study also differs from prior studies as it examines the effect of board gender diversity on each of constituting pillars of sustainability, namely environmental, social and economic.

Keywords

Sustainability performance, Malaysian firms, Governance, Board diversity, Women executives

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