WOMEN ON BOARD AND ITS IMPACT ON FIRM PERFORMANCE: EVIDENCE FROM MALAYSIAN ENERGY INDUSTRY

Abstract

Boardroom diversity attains vast attention due to the corporate legislation, reforms, and financial crisis and scandals of the last few decades. Though there is increasing trend of women in workforce, the presence of women directors is still not praiseworthy. For this, Malaysian government imposed 30% women quota. The objective of this paper to examine the impact of women directorship on the performance of Malaysian energy companies. Energy industry is chosen for its male dominated culture, along with its significant contribution to Malaysian economy. Thirty-one energy companies listed on Main Market of Bursa Malaysia were used as sample in this study. The timeframe of the study is 2013-2017 considering the quota policy period. Based on the agency theory and resource dependency theory, the independent variables are quota attainment, women quality index, and women in risk management. Return on assets and market capitalization are used as dependent variables as the proxy for firm performance. This study also examined the interaction of quota attainment and Shannon index to check for its moderating impact on firm performance. The Generalized Least Square regression analysis was used to test the proposed hypotheses. The panel data regression analysis revealed that women quality index and women in risk management has no significant impact on firm performance. However, quota attainment has negative significant impact on firm performance, whereas the moderation of quota attainment with Shannon index gives positive significant impact on firm performance. These results suggested that board should ensure quota implementation along with ensuring proper gender balanced board to bring fruitful impact on firm performance.