Women Directors’ Specific Attributes and

Company Performance: Insights from a

Mixed Method Study in Malaysia

Nor Atikah Shafai*, Saidatul Nurul Hidayah Jannatun Naim

Nor-Ahmad, Mohd Shazwan Mohd Ariffin, Wan Nordin Wan-Hussin

ABSTRACT
Manuscript type: Research paper
Research aims: Drawing on resource dependence and human capital
theory, this study aims to analyse the relationship between specific
attributes of women directors on company performance, specifically on
the market performance proxied by Tobin’s Q.
Design/Methodology/Approach: Data for the analysis are extracted from
the Top 100 Malaysian companies listed in the Minority Shareholders
Watch Group’s Corporate Governance Scorecard from 2018-2021. This
is supported by data from interviews with the board of directors and
top management to understand the impact of gender diversity on the
company’s performance.
Research findings: The findings suggest that the diversity of ethnicity and
competency among women directors positively and significantly affects
Tobin’s Q. Additionally, the results demonstrate that the proportion
of women directors and Blau’s gender diversity show no impact on
the market valuation. Moreover, this study also explores whether the

* Corresponding author. Nor Atikah Shafai is a Senior Lecturer at the Tunku Puteri
Intan Safinaz School of Accountancy, Universiti Utara Malaysia, 06010 Sintok, Kedah,
Malaysia, email: noratikah@uum.edu.my.
Saidatul Nurul Hidayah Jannatun Naim Nor-Ahmad is a Senior Lecturer at the Tunku
Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, 06010 Sintok,
Kedah, Malaysia, email: saidatul@uum.edu.my.
Mohd Shazwan Mohd Ariffin is a Senior Lecturer at the Faculty of Business, Economics
and Social Development, Universiti Malaysia Terengganu, 21300 Kuala Terengganu,
Terengganu, Malaysia, email: m.shazwan@umt.edu.my.
Wan Nordin Wan-Hussin is a Professor at the School of Accounting and Finance, Taylor’s
University, 47500 Subang Jaya, Selangor, Malaysia, email: wannordin.wanhussin@taylors.
edu.my.

https://doi.org/10.22452/ajba.vol17no2.2

Asian Journal of Business and Accounting 17(2), 2024 33

 COVID-19 pandemic and types of directorships have effects on gender
diversity and company performance nexus.
Theoretical contribution/Originality: This current study’s findings enrich
the literature by outlining the importance of having diverse attributes
among women directors. Unlike many previous studies, this study
incorporates both quantitative and qualitative approaches, derived from
several interview sessions with key industry players, to enrich the limited
quantitative findings.
Practitioner/Policy implication: The findings led to policy
recommendations for key stakeholders, suggesting that regulators
should encourage companies to focus on the qualities rather than just the
numbers when appointing women directors. Policy recommendations
on extending training to the senior management level and reviewing the
number of years and directorships may be used to provide a roadmap
for regulators, policymakers and companies to better meet the national
agenda on women directors’ appointments. This approach could also
benefit male directors and enhance overall board dynamics, ultimately
advancing the national agenda for gender diversity.
Research limitation: Future studies may consider other attributes
among women directors, such as age, experience, expertise and political
ideologies. In addition, other theories, like the upper echelon and
legitimacy theories, could be integrated into understanding the role of
board diversity in affecting company performance.

Keywords: Board diversity, company performance, resource dependence

theory, human capital theory, policy recommendations
JEL Classification: M48

1. Introduction
Gender diversity on corporate boards has emerged as a pivotal global
issue, with implications for team performance, board communication
dynamics, and overall company performance, as evidenced by a
body of research (Terjesen et al., 2009; Carter et al., 2010; Aripin et
al., 2016; Moreno-Gómez et al., 2018; Ramadan & Hassan, 2021). This
study seeks to advance our understanding of the impact of gender
diversity on company performance by exploring not just the level
but also the unique attributes that women directors can bring to
organisations. Inspired by Bennouri et al. (2018) and Brahma et al.
(2021), this study focuses on several attributes of female directors
that can explain cross-sectional variations in company performance.
Examining these attributes can enrich our understanding of the
impact of female directors, as Brahma et al. (2021) demonstrated
that the “post-appointment company performance of female board
representation can be explained by a number of female attributes” (p.
5706). Furthermore, Bennouri et al. (2018) asserted that by analysing

34 Asian Journal of Business and Accounting 17(2), 2024

the attributes of female directors, researchers could understand the
channel through which gender diversity in the board can influence
the decision-making and monitoring effectiveness of the board and,
consequently, company performance. Additionally, this research goes
further by offering insights drawn directly from board members and
senior management in the industry.
Governments worldwide have recognised the need for gender
diversity on corporate boards, responding to the underrepresentation
of women in such leadership roles through policy initiatives.
These measures include the Sarbanes-Oxley Act of 2002 in the
United States, which has undergone updates since 2011, and the
Hampton Alexander report in the UK, calling for 33% female
representation in the Financial Times Stock Exchange (FTSE) 100
leadership teams by 2020. Several other countries, such as Germany,
Norway, Spain, France, Iceland, Italy, Belgium, Finland, and
Kenya, have implemented legal quotas mandating that companies
appoint between 30% and 40% of women to corporate boards,
thus underscoring the global significance of gender diversity at the
board level. These endeavours are in harmony with the Sustainable
Development Goals (SDG 5 - Gender Equality) set forth by the United
Nations. They underscore the significance of gender equality and
women empowerment in connection with sustainable development,
economic growth, and the achievement of gender parity.
Turning our focus to Malaysia, efforts to increase women
directors’ presence in boardrooms began in 2011, when the Malaysian
Cabinet introduced a policy to have at least 30% women on corporate
boards by 2016 (The Star, 2011). Subsequently, the Malaysian Code on
Corporate Governance (MCCG) 2012 recommended that companies
openly disclose their gender diversity policy, targets, and measures
to meet them (Malaysian Code on Corporate Governance, 2012).
The MCCG 2017 further enhanced these recommendations, setting a
goal for the Top 100 listed companies to appoint at least 30% female
directors by 2020. Other listed companies were encouraged to include
women in board and senior management positions. In 2015, the
launch of 30% Club Malaysia signalled a commitment to collaborate
with regulators and create an inclusive ecosystem, reflecting the
Malaysian government’s determination to empower women and
promote their advancement as corporate decision-makers. Similarly,
in the Corporate Governance Strategic Priorities 2017-2020 report, the
Securities Commission (SC) has reiterated that mixed representation
of male and female directors can bring different perspectives,
competencies, functional expertise, approaches to stewardship, and

Asian Journal of Business and Accounting 17(2), 2024 35

risk-reward orientation to board deliberations, thus PLCs are required
to disclose their gender diversity policies, measures and targets
(Securities Commission Malaysia, 2018).
Despite commendable initiatives by the government and
corporations in Malaysia, progress in women serving as company
directors has been slow. Notably, the SC’s Corporate Governance
Monitor 2021 reported that 83% of publicly listed companies
(PLCs) failed to meet the 30% requirement for female directors, and
approximately 73% appointed just one female director. This data
illustrates a critical issue regarding compliance with gender diversity
recommendations and raises questions about why companies hesitate
to appoint women to leadership roles.
To address the gender diversity gap, the Malaysian government
recently mandated that all PLCs have at least one female director,
with implementation starting in 2022 for large-capital companies
and 2023 for others (Securities Commission Malaysia, 2021). This
regulatory change was likely driven by the need to accelerate the
appointment of female directors. The move has increased women’s
participation in boardrooms, as indicated by the SC’s Corporate
Governance Monitor 2022, which reported percentages of women
directors at 29% for the Top 100 companies and 20.5% for all PLCs.
These figures represent progress toward closing the gender diversity
gap and increasing women’s representation in decision-making.
However, there is a valid concern that companies may respond to the
mandate by appointing women directors to fulfil the legislative quota
without considering the attributes and contributions these directors
can bring. Therefore, examining the impact of these appointments
empirically and whether they lead to substantive contributions is
crucial.
Moreover, despite significant progress in women’s education
and labour market participation (Department of Statistics Malaysia,
2023), women continue to encounter challenges in breaking into
boardrooms, and their representation in these roles still lags behind
their increasing workforce participation. The worldwide scenario
mirrors this, and comparable challenges regarding the delayed
adherence to gender diversity mandates have been highlighted in
various nations, extending beyond Malaysia. This concern may
stem from various factors. As outlined by Hillman et al. (2007), only
large companies show a greater tendency to appoint a more gender-
diverse group of directors, aiming to enhance legitimacy within the
corporate hierarchy. This inclination to gender imbalance on boards
is attributed to the persistent structural obstacles female board

36 Asian Journal of Business and Accounting 17(2), 2024

candidates face. Moreover, the representation of women on boards
is influenced by the unique characteristics of individual companies
and industries, as highlighted by Brieger et al. (2019). A survey
conducted in the United States (Groysberg & Bell, 2013) documented
that women had to be more qualified than men to break the glass
ceiling. In addition, other than the tendency for male directors to be
oblivious to the female directors’ experience, the latter shared that
they never felt like full members due to disconnection from their male
counterparts. Likewise, a low level of women board representation
is due to a lack of support and resources (Amaechi, 2018) and
overt or subtle resistance to their authority from subordinates and
peers (Weck et al., 2022). The findings suggest that the treatment
from the other gender has dimmed women’s aspiration to serve as
board members, resulting in companies’ slow compliance with this
requirement. While global efforts to promote gender diversity are
commendable, the reality remains that women are underrepresented
in corporate leadership roles, and disparities persist among countries.
In addition to the perception that male directors are sceptical
about appointing their female counterparts, another perspective
as pointed out by Michele Kythe Lim, the President and Chief
Executive Officer of the Institute of Corporate Directors Malaysia
(ICDM), should be considered. She opined that the lack of women
empowerment, support systems, and opportunities among Malaysian
women has impeded companies’ movements towards achieving
the target (Kuen, 2023). The slow fulfilment could be caused by the
women, who are apprehensive about taking the role. Therefore,
it is critical to better understand this issue by conducting both
quantitative and qualitative research. In the accounting field, mixed
methods have been used in gender studies, albeit sporadically, in
which in-depth interview data supplements the somewhat limited
quantitative data (Lyonette & Crompton, 2008; Doherty & Manfredi,
2010; Assenga et al., 2018).
This study makes three significant contributions to the literature.
Firstly, it assesses the current representation of women directors in
the Top 100 companies based on the quality of corporate governance
following the implementation of the legal mandate. This assessment
is pivotal in evaluating the efficacy of the requirement. Secondly,
unlike previous studies that primarily examined the relationship
between women’s participation and company performance,
this research extends the scope by using Blau’s diversity index
to gauge the attributes of female directors in terms of ethnicity,
nationality and competency. This measurement effectively captures

Asian Journal of Business and Accounting 17(2), 2024 37

variance within a group of individuals and is a suitable measure
of diversity for categorical variables. In line with Brinkhuis and
Scholtens (2018), this study utilises Tobin’s Q to measure company
performance. This measure aligns with investor perspectives and
forward-looking considerations, making it more informative than
accounting-based measures such as return on assets (ROA) and
return on equity (ROE). Lastly, the study conducts interview sessions
with the board of directors and senior management to gain raw
input and further insights on board diversity issues. By engaging
in qualitative discussions with the upper echelons, the study aims
to gain insights that quantitative analyses alone may not capture,
allowing for exploring nuances, perceptions, and contextual factors
surrounding gender diversity on boards and contributing to a more
comprehensive understanding. Furthermore, the qualitative approach
seeks to uncover potential challenges and opportunities related to
gender diversity that may not be apparent through quantitative data
alone. By delving into the lived experiences and perspectives of the
board of directors and top management, the study aims to identify
factors that influence decision-making processes, board dynamics,
and company performance. Lastly, while quantitative measures, such
as Tobin’s Q, provide important indicators of company performance,
qualitative insights can complement these measures by offering a
deeper understanding of the human and social aspects contributing to
board effectiveness. The combination of quantitative and qualitative
methods in this study thus strengthens its robustness and enriches
its overall analysis.
This research delves into the impact of women directorships
on company performance, going beyond mere gender proportion
to consider factors like ethnicity, nationality and competency.
Aligned with Sustainable Development Goal 5 (SDG 5), our study
aims to contribute to advancing gender equality and women’s
empowerment. By exploring diverse attributes of women leadership,
this study provides insights that extend beyond the mere presence
of female directors. Furthermore, it selects company performance
as the dependent variable, as investors have high expectations
for the Top 100 companies in the sample, often considering them
blue-chip companies with strong performance and adherence to
MCCG recommendations. Thus, this research aims to identify the
attributes of women directors that can enhance board quality and,
by extension, company performance. Lastly, this study aims to
rigorously analyse the influence of female directors on company
performance by expanding our investigation to incorporate multiple
economic periods reflecting differential financial distress risk. This

38 Asian Journal of Business and Accounting 17(2), 2024

involves examining the pre- and during-COVID-19 periods, aligning
with the methodology employed by Khatib and Nour (2021). These
insights are anticipated to provide valuable input to relevant
government ministries, such as the Ministry of Women, Family, and
Community Development, in advancing their critical national agenda
of promoting gender equality and increasing women’s participation
in decision-making roles at all levels.

2. Literature Review and Hypotheses Development

2.1 Gender, Ethnicity and Nationality Diversity and Company
Performance
Research on gender diversity in boardroom positions and its impact
on companies has garnered significant attention. Cox and Blake’s
(1991) study found that diverse senior management teams can
lead to broader decision-making perspectives, increased creativity,
innovation, and effective marketing to a diverse clientele. However,
diversity can also bring communication challenges and interpersonal
conflicts, potentially harming companies.
Resource dependence theory significantly impacts research
in corporate boards. Developed by Pfeffer and Salancik in 1978,
resource dependence theory focuses on how organisations interact
to exchange resources, emphasising the critical role of resources
in a company’s long-term success (Pfeffer & Salancik, 1978, p. 2).
Hillman et al. (2000) expanded this theory, asserting that board
diversity enhances a company’s ability to navigate a complex and
uncertain external environment by tapping into diverse expertise.
Moreover, the researchers suggested that a diverse board enhances
the functioning of organisations, whereby it brings together a
broader range of information, connects with external stakeholders,
signals a commitment to diversity, attracts individuals from
diverse backgrounds, allows a better grasp of complex markets,
and stimulates creativity and innovation. These advantages lead to
more effective problem-solving by considering various perspectives,
promoting openness and cultural sensitivity, and ultimately
facilitating internationalisation (Fernández-Temprano & Tejerina-
Gaite, 2020). Carter et al. (2010) echoed and postulated that women
directors with external networks facilitate access to resources,
improve communication with stakeholders, and contribute to
sustained commitment to social and financial objectives, aligning with
the predictions of resource dependence theory regarding the positive
impact of gender diversity on business performance.

Asian Journal of Business and Accounting 17(2), 2024 39

 Numerous studies indicate that the presence of women on
corporate boards positively affects the company’s performance. In a
multi-country analysis, Low et al. (2015) showed that having more
female directors positively impacted company performance in Hong
Kong, South Korea, Malaysia, and Singapore. However, in countries
with high female economic engagement, the benefits of gender
diversity appeared less pronounced, possibly due to tokenism or
resistance to gender quotas. Further, Badru et al. (2019) show that
women on corporate boards positively influence the allocation of IPO
proceeds for investment opportunities in Malaysia. Kagzi and Guha
(2018) identified a positive relationship between the board gender
diversity index and company performance in India. In research
conducted in the United States (Carter et al., 2003), the United
Kingdom (Brahma et al., 2021) and Australia (Yarram & Adapa, 2023),
scholars observed consistent findings indicating a positive correlation
between women’s representation on boards and company financial
performance (both ROA and Tobin’s Q) consistent with the notion
that women exhibit distinct qualities such as patience, attention to
detail, resilience, and thoroughness in task execution, in contrast to
men. However, in terms of risk-taking, the perception that men are
more prone to taking risks than women requires a re-evaluation, as
the definition of risk varies between genders. Men typically engage
in risks related to physical and financial aspects, while women are
inclined to step out of their comfort zones, taking risks that could
impact their reputation. Consequently, studies suggest women take
as many risks as men (Sundheim, 2013; Devine, 2017).
Other than the traditional measurement, the proportion of
women directors, previous studies also examined board gender
diversity by assessing the power of group heterogeneity using
Blau’s Index. This is because both genders possess distinct attributes
and contributions. Islam et al. (2023) found that a highly gender-
diversified board stimulates a new outlook in the boardroom that
eliminates homogeneous thinking in decision-making. Lee-kuen
et al. (2017) reported that a well-balanced mix of women and male
directors in Malaysia complements each other’s perspectives,
experiences, and approaches and enhances collaboration. In
alignment with the resource dependence theory, these findings
suggest the potential for women to positively impact company
performance.
On the contrary, some studies found a negative link between
board gender diversity and company performance. Heterogeneous
gender boards often lead to conflicts, miscommunication, and

40 Asian Journal of Business and Accounting 17(2), 2024

divergent viewpoints (Wang et al., 2019). Nguyen et al. (2020) echoed
these concerns in developing countries, suggesting that voluntary
regulations yielded more positive results. Some research failed to
identify a significant correlation between the proportion of women
on boards and company performance (Iacoviello et al., 2015; Ionascu
et al., 2018; Bustamam et al., 2022). Marquez-Cardenas et al. (2022)
noted no improvement in company performance, partly due to
underrepresented women on Latin American boards. Ramadan and
Hassan (2021) reported that investors did not view board gender
diversity positively.
As a result, the effectiveness of boards in achieving desired
outcomes through the inclusion of women is uncertain, as academic
research has yet to establish a clear and conclusive connection
between gender diversity and board performance. Further research
is needed to explore the impact of mandatory requirements in the
Malaysian context, considering the identical regulatory framework
imposed on companies. As such, this study’s null hypothesis is
presented as follows:

Hypothesis 1: Gender diversity on the board does not relate to company performance.

This study examines board diversity in Malaysia, where corporate

boards reflect ethnic and national backgrounds due to the country’s
multi-ethnic nature and attractiveness to foreign investors. Carter
et al. (2010) underscore the benefits of ethnic diversity on boards,
enhancing decision-making on issues specific to diverse ethnic
groups. Such diversity provides valuable insights to management
for optimal corporate decisions, and companies with diverse boards
receive positive perceptions from product and labour markets.
Similarly, the increasing trends of globalisation and business
expansion have altered the operational dynamics of businesses. This
shift is evident in the tendency of companies to incorporate more
foreign individuals onto their boards (Oxelheim et al., 2013; Schmid
& Roedder, 2021).
Resource dependence theory is applicable in both developed
and developing markets when examining the impact of board
diversity on company performance. Singh (2007) found that ethnic
minority boards possess substantial human and social capital due to
advanced education and extensive social networks. This aligns with
the challenges faced by companies operating in sectors where these
directors are appointed, such as globalisation, increased regulation,
corporate social responsibility, reputation management, learning,

Asian Journal of Business and Accounting 17(2), 2024 41

and increased interconnectedness. Additionally, aligned with the
principles of resource dependence theory, research indicates that
these foreign directors contribute expertise, knowledge, and new
networks, collectively benefiting the company (Mnzava, 2022). All
these aspects support the resource dependence explanation and
demonstrate that companies appointing ethnic minority directors
are responsive to calls for increased diversity (Singh, 2007; Carter et
al., 2010).
Prior studies documented mixed findings on the effects of
ethnicity and nationality diversity. Studies conducted in Malaysia
suggest that an increase in ethnic diversity offers superior
harmonisation, greater innovativeness and creativity, and a better
quality of decision-making and oversight function, which eventually
leads to a greater level of company performance (Marimuthu, 2008;
Abdullah & Ku Ismail, 2013; Rahman et al., 2020). Similar findings
emerged in Nigeria, where Ujunwa (2012) observed that board
ethnicity and nationality diversity positively impacted company
performance. In South Africa, board diversity is also positively
correlated with market valuation, reinforcing the value of ethnic
diversity in the stock market. A recent comprehensive study
conducted in the Middle East and North African countries found
that board diversity in ethnicity and nationality enhances pay-for-
performance sensitivity (Sarhan et al., 2019). These results align
with resource dependence theory’s predictions that ethnic diversity
enhances board independence, executive oversight, and decision-
making and strengthens the organisation’s external linkages for
resource acquisition, ultimately improving market valuation (Ntim,
2015).
Meanwhile, Gul et al. (2016) found that ethnic diversity in
Malaysia fails to influence company performance, possibly due to
the heavy political connections in the country. A study by Eulerich
et al. (2014) on board diversity attributes such as nationality
predominantly revealed adverse effects on corporate performance.
This could be attributed to the excessive internationality on boards,
which may hinder communication among board members and
impede decision-making processes in the German context (Eulerich
et al., 2014). However, Sarhan et al. (2019) showed that diversity in
director nationality positively affects corporate financial performance.
Meanwhile, Fernández-Temprano and Tejerina-Gaite (2020)
discovered that nationality mix is associated with higher performance
levels only in the case of executive directors. The fragmented
evidence on the ethnicity and nationality mixes on firm performance

42 Asian Journal of Business and Accounting 17(2), 2024

suggests that decisions regarding board diversity must consider
cost-benefit considerations alongside moral values (Sarhan et al.,
2019). In addition, Ruigrok et al. (2007) noted that foreign directors
tend to be more independent, hold fewer directorships at other
Swiss boards, and differ significantly in educational background,
educational level, and board tenure. They concluded that effectively
managing diversity on corporate boards requires understanding the
characteristics, qualifications, and affiliations that these directors
bring to the boardroom, emphasising the importance of considering
national circumstances rather than relying solely on research from
other countries.
Despite a plethora of studies on board ethnicity and nationality
across different contexts, the benefits of board diversity along these
dimensions remain highly contingent on the companies’ specific
environment and market maturity, necessitating further exploration
within the dynamically evolving Malaysian market context. While the
potential for a connection between the two diversity dimensions and
company performance exists, the direction of this relationship lacks
clarity. Hence, the null hypotheses are as follows:

Hypothesis 2: Ethnic diversity among women directors does not relate to company
performance.
Hypothesis 3: Nationality diversity among women directors does not relate to company
performance.

2.2 Competency Diversity and Company Performance

Human capital theory states that investments in education and
training yield higher wages and lower unemployment rates. This
theory emphasises the importance of human resource capital for
organisations, such as education, skills, qualifications, and experience.
A study by Kesner (1988) found that extensive experience is necessary
for directors to serve on influential board committees. This led
to the belief that the lack of experience is the reason for the low
representation of women on corporate boards. However, Terjesen
et al. (2008) debunked this myth by studying the human capital
dimensions of new directors in FTSE 100 companies. They discovered
that women are more likely to have MBA degrees, international
experience, and university degrees, which positively impact company
performance. Women also account for most university graduates in
Europe and the USA. Therefore, it is reasonable to hypothesise that
women on corporate boards enhance human capital and improve
company performance.

Asian Journal of Business and Accounting 17(2), 2024 43

 Beyond social and ethical considerations, female representation
on boards can provide access to a larger pool of human capital,
benefiting a company’s competitiveness and performance.
Women have different values at the workplace, focusing on task
accomplishment, high standards, challenges, attention to detail, self-
development, and work-life balance. This makes them a valuable
source of human capital with the potential for value creation and
the ability to introduce new management practices. Ultimately, the
representation of women on boards improves board functioning
(Wellalage & Locke, 2013; Kulkarni & Mishra, 2022).
Studies have shown that board competency diversity affects
a company’s performance. Saha and Maji (2022) studied Indian
companies and found a positive impact of board educational
diversity on financial performance. Volonté and Gantenbein
(2016) examined the relationship between human capital and
internationalisation decisions. They found that director characteristics
such as international experience, industrial know-how, CEO
experience, and financial know-how influence company performance.
Similarly, studies conducted in Malaysia showed that a competent
board of directors leads to better board oversight and shareholder
protection (Johl et al., 2015).
However, in the Indonesian context, Kontesa et al. (2020) found
that only board networking and experience significantly affected
company performance, not education. This suggests that shareholders
should prioritise board members with extensive networking and
experience. Studies have shown that gender diversity on corporate
boards can enhance human capital, increase company performance,
and improve board functioning. However, the impact of specific
board characteristics may vary across different contexts. Despite
human capital theory highlighting the importance of education and
training for individuals and their contributions to organisations, the
empirical evidence is less emphatic. In light of the mixed findings,
this study postulates the null hypothesis as follows:

Hypothesis 4: Competency diversity among women directors does not relate to company
performance.

3. Data and Methodology

3.1 Sample Selection and Data Collection
This paper employs a mixed methodology of primary and
secondary data collection, where secondary data is taken from the
annual reports (profiles of the women directors), Thomson Reuters

44 Asian Journal of Business and Accounting 17(2), 2024

Datastream and Refinitiv Eikon dataset (financial data). To meet the
study’s goal, the sample comes from the Top 100 PLCs in Malaysia
from 2018 to 2021 that appear in the Minority Shareholders Watch
Group (MSWG) Corporate Governance Scorecard (Husnaini &
Basuki, 2020; Teh, 2022). The rationale behind choosing companies
listed on the MSWG Corporate Governance Scorecard lies in
the anticipation that these PLCs are more likely to comply with
the 30% women directors’ requirement outlined in the MCCG
2017recommendations and other mandates from the Malaysian
government (Lim et al., 2019; Rosli & Hasbolah, 2022; Ahmad et al.,
2020). The sample covers periods before COVID-19 and during the
COVID-19 pandemic, which extends past literature (Khatib & Nour,
2021; Qadri et al., 2023). This study contend that employing panel
data analysis that covers multiple periods offers a richer and more
thorough insight into the research topic.
The quantitative analysis using secondary data is supplemented
with qualitative methodology using face-to-face and online interviews
with the board of directors and top management of selected
companies to understand further their views on gender diversity
and its impact on companies’ performance, as well as suggestions for
policy recommendations from the industry practitioners themselves
(please refer to the appendix for full interview protocol). The
research team was able to get access to an interview with four listed
companies, comprising companies that have achieved and have not
yet achieved 30% of the women on board as per the recommendation
of MCCG, to gain diverse views on the topic. The details of each
interviewee are presented in Table 1 below:

Table 1: Summary of Interview Sessions Conducted

Method Venue Duration Designation Board Gender Interviewee Industry Sector

(minutes) Composition Gender
Male Female
Face to Head 60 Independent 4 3 Male Telecommunication
face Quarters Non- & Media
Executive
Director
Virtual Webex 48 Chief 8 2 Male Construction
Corporate
Officer
Virtual Webex 60 Head (Group 7 3 Female Property
People)
Virtual Webex 60 Independent 4 2 Female Plantation
Non-
Executive
Director

Asian Journal of Business and Accounting 17(2), 2024 45

 Based on the Securities Commission report, there was a marginal
improvement in the number of women directorships among PLCs,
especially in 2020 (Securities Commission 2021: p. 8). Despite the
continuous upward trajectory in trends throughout the sample period
under consideration, this study identified a noteworthy occurrence
wherein certain companies lacked gender equality on their boards
or did not have at least one female member. This anomaly has raised
questions regarding the efficacy of the board’s gender diversity
policy. Consequently, this research seeks to ascertain how companies
address and respond to such calls for gender diversity.
The researcher followed the iterative coding process by
O’Dwyer (2004) and Miles et al. (2014) of data reduction, display,
and conclusion drawing/verification/interpretation. The audio
was transcribed and analysed thematically to arrive at the common
themes that cut across all interview transcripts.

3.2 Measurement for Dependent Variable

Table 2 contains the definition of the variables used in this study.
For performance measures, this study follows the literature by
using Tobin’s Q (Jubilee et al., 2018; Nguyen et al., 2020). Tobin’s
Q represents the market expectations about future earnings. The
rationale for selecting Tobin’s Q as the measurement for company
performance is that, compared to return on assets (ROA) and return
on equity (ROE), Tobin’s Q is less affected by accounting conventions
and earnings manipulations. Tobin’s Q is measured by the total
market value of the company divided by the total asset value of the
company (Lim et al., 2019; Brahma et al., 2021; Hosny & Elgharbawy,
2022).

3.3 Measurement for Independent Variables

Gender diversity is measured by the proportion of female directors
(FEM) (Lim et al., 2019; Ahmad et al., 2020) and Blau’s index (BLAU_
GEN). In addition, this study further explores the diversity of female
directors’ attributes. This study measures ethnic diversity (BLAU_
ETH) based on the three largest ethnic groups in Malaysia, namely
the Malays, Chinese and Indians, followed by other races. This study
believes that as a multiple-ethnicity country, Malaysia provides a
unique setting to evaluate the pros and cons of ethnic diversity, as
Rachagan et al. (2015) and Gul et al. (2016) suggested. This study also
includes nationality diversity (BLAU_NAT) by identifying local and
foreign women directors. Past studies show that directors’ nationality

46 Asian Journal of Business and Accounting 17(2), 2024

and company performance produced varied findings (Estelyi & Nisar,
2016). Finally, for competency diversity (BLAU_COM), this study
employs four categories based on female directors’ education level,
i.e., Bachelor, Masters, Doctoral and others (Singh et al., 2015).

Table 2: Definition of Variables

Items Acronym Operational Definition Supporting Literature

Tobin’s Q Tobin’s Q Brahma et al. (2021);
Total market value divided by the total
Hosny & Elgharbawy
asset value of the company
(2022)
Gender FEM Lim et al. (2019);
Percentage of female directors on board
Diversity Ahmad et al. (2020)
BLAU_GEN Blau’s index
= 1- [(a/e)2 + (b/e)2]
note:
Gul et al. (2016)
a = number of male directors
b = number of female directors
e = total directors
Ethnic BLAU_ETH Blau’s index
Diversity = 1- [(a/e)2 + (b/e)2 + (c/e)2 + (d/e)2]
note:
a = number of Malay female directors
Rachagan et al. (2015);
b = number of Chinese female directors
Gul et al. (2016)
c = number of Indian female directors
d = number of female directors from other
races
e = total female directors
Nationality BLAU_NAT Blau’s index
Diversity = 1- [(a/e)2 + (b/e)2]
note:
Estelyi & Nisar (2016)
a = number of local female directors
b = number of foreign female directors
e = total female directors
Competency BLAU_COM Blau’s index
Diversity = 1- [(a/e)2 + (b/e)2 + (c/e)2 + (d/e)2]
note:
a = number of female directors with
bachelor degrees
b = number of female directors with Singh et al. (2015)
masters degrees
c = number of female directors with PhD
d = number of female directors having
other qualification
e = total female directors
Company FSIZE Natural log of total assets Gul et al. (2016;
Size Hosny & Elgharbaw
(2022)
Independent BIND Percentage of independent board members Gul et al. (2016);
Director Hosny & Elgharbawy
(2022)
Audit Firm BIG4 1 if a company is audited by Big4 auditors
Gul et al. (2016)
Size and 0 otherwise

Asian Journal of Business and Accounting 17(2), 2024 47

 Independent BIND Percentage of independent board Gul et al. (2016); Hosny &
Director members Elgharbawy (2022)

Audit Firm Size BIG4 1 if a company is audited by Big4 Gul et al. (2016)
auditors and 0 otherwise

3.4
3.4 Empirical Model
Empirical Model
This study
This study examines
examines the association
the association between
between female female
directors directors
and company and by
performance
company performance
estimating the by estimating
following regression model: the following regression model:

Tobin’s Q = a0 + ß1(FEM or BLAU_GEN) + ß2BLAU_ETH+ ß3BLAU_NAT +

(1)
ß4BLAU_COM + ß5FSIZE + ß6BIND + ß7BIG4 + ε (1)

wherewhere company performances

company performances are measured by Tobin’s Q.
are measured byExperimental
Tobin’s variables,
Q.
consist of FEM or BLAU_GEN, BLAU_ETH, BLAU_NAT
Experimental variables, consist of FEM or BLAU_GEN, BLAU_ETH, and BLAU_COM. The model
included controland
BLAU_NAT variables such as company
BLAU_COM. size, independent
The model included directors
controlandvariables
audit firm size,
similar to past studies (Gul, 2016; Hosny & Elgharbawy, 2022), as shown in Table 2. This
such as company size, independent directors and audit firm size,
study additionally performed the Breusch-Pagan/Cook-Weisberg test to identify any
similar to past studies (Gul, 2016; Hosny & Elgharbawy, 2022), as
heteroscedasticity concerns. The results revealed a Prob>chi2 value of 0.00, indicating that the
shown in Table 2. This study additionally performed the Breusch-
variables are suitable for analysis and no heteroscedasticity issues were detected. A link test
Pagan/Cook-Weisberg test to identify any heteroscedasticity
for model specification was conducted to validate the robustness further. The findings indicate
concerns. The results revealed a Prob>chi2
that the squared predictions exhibit explanatory value
power (Prob > Fof= 0.00, indicating
0.00, Root MSE = 0.91),
that the variables are suitable for analysis
confirming the adequacy of our model specification. and no heteroscedasticity
issues were detected. A link test for model specification was
conducted
4. to validate
Discussion of Findingsthe robustness further. The findings indicate
that the squared predictions exhibit explanatory power (Prob > F
=4.10.00,Descriptive
Root MSE = 0.91), confirming the adequacy of our model
Statistics
specification.
Table 3 summarises the descriptive statistics of the dependent, experimental and control
variables for 400 firm-year observations from 2018 to 2021. Regarding dependent variables,
4. Discussion of Findings
the average for Tobin’s Q is 2.07, with a minimum of -4.64 and a maximum of 6.24. This
4.1
study’s Descriptive
average Tobin’s Statistics
Q is slightly higher than Lim et al. (2019), which is most likely because
this study’s sample comprises the Top 100 PLCs that are market leaders with strong corporate
Table
governance3 summarises the the
practices. Regarding descriptive
experimentalstatistics ofFEM
variables, for the and
dependent,
BLAU_GEN, the
experimental and control variables for 400 firm-year observations
average values are 26% and 0.34, which means the majority of firms in our sample have not
from
met the2018targettoof2021.
30% Regarding dependent
female directorship. variables,
The minimum theof average
value zero for FEMfor and
Tobin’s Q is 2.07, with a minimum of -4.64 and a maximum
BLAU_GEN indicates that some boardrooms are still reluctant to appoint female directorsof 6.24.
This
despitestudy’s average
encouragement from Tobin’s Q is
the Malaysian slightlyThe
government. higher
maximumthan Limof et
values 80%al.and 0.5
(2019), which is most likely because this study’s sample
for FEM and BLAU_GEN, respectively, indicate that there are companies where female comprises
the Topexceed
directors 100 PLCs that are
male directors market
as well leaders
as a balanced withofstrong
number male andcorporate
female directors.
governance practices.theRegarding
Similarly, for BLAU_NAT, results exhibitthe
that experimental variables,
some companies recruited forfemale
all local
FEM and
directors, BLAU_GEN,
whilst the average
a number of companies have avalues
balancedare 26%ofand
number local0.34, which
and foreign women
directors.the
means Moving onto BLAU_ETH,
majority of firms inresults showed that
our sample several
have notcompanies
met theappointed
target of women
12
30% female directorship. The minimum value of zero for FEM and
BLAU_GEN indicates that some boardrooms are still reluctant to
appoint female directors despite encouragement from the Malaysian
government. The maximum values of 80% and 0.5 for FEM and
BLAU_GEN, respectively, indicate that there are companies where
female directors exceed male directors as well as a balanced number
of male and female directors. Similarly, for BLAU_NAT, the results

48 Asian Journal of Business and Accounting 17(2), 2024

exhibit that some companies recruited all local female directors,
whilst a number of companies have a balanced number of local and
foreign women directors. Moving onto BLAU_ETH, results showed
that several companies appointed women directors from one race
(minimum of 0.00), whilst some companies have a highly diversified
ethnicity among women directors (maximum of 0.75). These results
bode well as Malaysia is a multicultural country, and companies
are expected to integrate directors from different races. As for
BLAU_COM, the minimum and maximum diversity of 0.00 and 0.67,
respectively, illustrate the practice of recruiting women directors from
the same education level, as well as from diverse education levels.
Concerning control variables, the total assets of the sample
firms range from RM37 million to RM857 billion, with an average of
RM4.2 billion. Additionally, 30% of board members are independent
directors and four-fifths of the sample firms are clients of the Big 4
audit firms.

Table 3: Descriptive Statistics

Std.
Item Minimum Maximum Mean Skewness Kurtosis
Deviation
Statistic Statistic Statistic Statistic Statistic Statistic
Tobin’s -4.64 6.24 2.07 2.18 -0.97 1.68
Q
FEM 0.00 80.00 26.13 14.26 0.48 0.32
BLAU_ 0.00 0.50 0.34 0.13 -0.99 0.50
GEN
BLAU_ 0.00 0.75 0.19 0.24 0.57 -1.44
ETH
BLAU_ 0.00 0.50 0.02 0.11 3.65 11.51
NAT
BLAU_ 0.00 0.67 0.24 0.25 0.16 -1.77
COM
FSIZE 17.44 27.48 22.16 2.46 -0.20 -0.66
BIND 0.00 93.75 30.24 28.82 0.09 -1.65
BIG4 0.00 1.00 0.80 0.40 -1.50 0.26

Refer Table 2 for variable definitions. N=400

Table 4 shows the diversity trend of female directors’ attributes

over the sample period. Generally, gender and nationality diversity
among female directors remain stable. However, there is a gradual
rise in the ethnic and competency diversity among female directors,

Asian Journal of Business and Accounting 17(2), 2024 49

with BLAU_ETH increasing from 0.18 in 2018 to 0.21 in 2021, whereas
BLAU_COM increases from 0.21 to 0.26 between 2018 and 2021. The
average BLAU_GEN of 0.34 suggests that the majority of the Top 100
firms have not met the 30% representation of women directors from
2018-2021.

Table 4: Trend in Ethnicity, Nationality and Competency of Female Directors

Period 2018 2019 2020 2021

Std. Std. Std. Std.
Variables Mean Mean Mean Mean
Dev Dev Dev Dev
BLAU_GEN 0.34 0.14 0.34 0.13 0.34 0.13 0.35 0.11
BLAU_ETH 0.18 0.23 0.19 0.24 0.18 0.241 0.21 0.25
BLAU_NAT 0.03 0.12 0.02 0.11 0.03 0.11 0.02 0.09
BLAU_COM 0.21 0.24 0.24 0.24 0.25 0.25 0.26 0.25

Refer Table 2 for variable definitions.

4.2 Quantitative and Qualitative Analysis

Table 5 reports the ordinary least squares regression analysis on
the association between board gender diversity (FEM in Panel A
and BLAU_GEN in Panel B), the three specific attributes of women
directors and company performance (indicated by Tobin’s Q). The
adjusted R2 is 54% in both models, suggesting a reasonable model
fit. Both FEM and BLAU_GEN are not significant, suggesting that
having board gender diversity does not enhance market performance,
consistent with previous studies by Iacoviello et al. (2015) and
Ionascu et al. (2018).
Concerning the women directors’ attributes, BLAU_ETH
positively influences company performance with a coefficient
(t-value) of 0.72 (2.92) and 0.68 (2.73) in Panel A (B), respectively.
Corresponding with resource dependence theory, the results
show that ethnic diversity among women directors could lead to
better decision-making and more effective corporate governance
(Fernández-Temprano & Tejerina-Gaite, 2020). By considering a
more comprehensive range of viewpoints, diverse ethnicity among
women directors can make more informed and balanced decisions,
positively impacting company performance. Besides, the reasons
behind this relationship include diverse perspectives in decision-
making, enhanced risk management, talent retention and attraction,
and improved stakeholder trust and reputation. These factors
are conducive to more robust company performance and market

50 Asian Journal of Business and Accounting 17(2), 2024

valuation (Kagzi & Guha, 2018). Another attribute of diversity namely
competency among female directors, measured by the BLAU_COM,
also positively affects the firm performance for both Panels with a
coefficient (t-value) of 0.63 (2.47) and 0.52 (2.04). However, diversity
in the nationality of female directors (BLAU_NAT) does not
necessarily bring diverse perspectives, experiences, and expertise
from their experience in different countries to the decision-making
process (Sarhan et al., 2019). This insignificant result could be due to
the deficient presence of foreigners among female board members
in Malaysia, as indicated by the average BLAU_NAT of a mere 0.02
(see Table 3). The control variables FSIZE and BIND correlate with
company performance but not BIG4.

Table 5: Regression on the Association between Board Gender Diversity,

Specific Attributes of Women Directors and Tobin’s Q

Panel A Panel B
Item Coefficient t-value Coefficient t-value
(Constant) 11.99 14.89*** 11.94 14.63***
FEM -0.01 -1.34
BLAU_GEN -0.18 -0.34
BLAU_ETH 0.72 2.92*** 0.68 2.73***
BLAU_NAT 0.73 1.64 0.61 1.38
BLAU_COM 0.63 2.47*** 0.52 2.04**
FSIZE -0.55 -15.58*** -0.55 -15.53***
BIND 0.01 4.51*** 0.01 4.54***
BIG4 0.02 0.15 0.03 0.17
R2 0.55 0.55
Adj R2 0.54 0.54
F-value 53.72 52.80
Significance <0.001 <0.001
Year Yes Yes
Root MSE 1.11 1.11
Breusch-Pagan 34.78 34.90

***, **, * refer to significant levels at 1%, 5% and 10%

Refer Table 2 for variable definitions.
N = 400

Asian Journal of Business and Accounting 17(2), 2024 51

 The research asserts that there is a relationship between gender
diversity in company leadership (specifically on the board) and
positive organisational outcomes. These outcomes can be attributed to
several factors. For instance, gender diversity is believed to contribute
to a broad range of perspectives within the company’s decision-
making processes. This diversity can lead to more comprehensive
and well-informed decisions, as individuals bring unique viewpoints
shaped by their varied experiences and backgrounds. Companies
with gender diversity are posited to be more attractive to talent.
This diversity can contribute to a positive organisational culture and
attract a wider pool of skilled individuals, ultimately aiding talent
retention and recruitment efforts. To substantiate the claim that
appointments of female directors prioritise quality over quantity,
PLCs with gender diversity are posited to be more attractive to talent.
This diversity can contribute to a positive organisational culture and
attract a wider pool of skilled individuals, ultimately aiding talent
retention and recruitment efforts. Our finding suggests a counterpoint
by showing that having multi-national female directors on the board
(BLAU_NAT) might not necessarily bring the expected diversity in
perspectives, experiences, and expertise.
Qualitative data from interviews suggests that the competency
of the appointed directors is a leading indicator of whether they
would add value to the board, making the board more effective in
influencing its overall performance. The interviewees emphasise
the importance of the candidates’ quality, such as their experience,
education, expertise, character, probity, and how the newly appointed
director will fit into the current dynamics of the board, more than
whether they are female or male. This aligns with the quantitative
finding that a higher proportion of women directors may not
necessarily impact company performance, supporting the notion
that the quality of directors is paramount. Companies also look at
the current board composition and the nature of the industry they
operate in to look at the gap to be filled by the new appointment
to complement the board. This has been demonstrated by how a
construction company finds a suitable director by looking at the
gap in the current board’s expertise that is too heavy on financial
expertise. Hence, they look for candidates with more construction-
related technical expertise to fill in the current board gap in terms of
competency:

“You can’t just look at gender. Yes, you know, you got to look at other criteria.
You’ve got to look at, the experience and the skills gap within the board. Our
board, at the moment is too financial, potentially with too much financial

52 Asian Journal of Business and Accounting 17(2), 2024

 expertise. And what we need is actually more industry expertise. So, what we’re
trying to do is get some female engineers, directors with property development
experience, engineering experience, and finding those isn’t easy. Because,
okay, you know, you’ve got to look at the character to have a well-functioning
board. It’s not just about diversity, you know, you’ve got people that are able
to communicate. Well, that people that can articulate, people that can work,
collaboratively with the other board members and the management as well.
That’s when you have a very well-functioning cohesive board.”
[Chief Corporate Officer, Construction Company]

The same interviewee also noted that competent female directors

have contributed tremendously to the board with valuable and
constructive insights, bringing fresh perspectives and inquiring more
before making any decisions.

“We’ve had some amazing female directors in the past. We, we had a lawyer
by background and the insight she brought into the board are fantastic. Really
fantastic. Really added a lot of value, um, and came up some really constructive
ideas and, uh, you know, and the way she communicated was fantastic as well.
You know, so all board members, regardless they’re male or female, have to have
those traits; it is not just about diversity.”
[Chief Corporate Officer, Construction Company]

Hence, it is apparent that beyond board gender, appointments of

new directors should look at diversity in competency and overall fit
with the board dynamics as a contributing factor of an effective board
that could bring a positive outcome to the company’s bottom line, as
shown by both primary and secondary data analysis above.
Considering the insignificant findings for FEM and BLAU_
GEN on company performance (Tobin’s Q), this study performed
additional tests by considering the types of directorship, namely
percentage of executive female directors on the board (FEM_ED),
percentage of non-independent non-executive female directors
on the board (FEM_NINE) and percentage of independent non-
executive female directors on the board (FEM_INED), which perhaps
could provide additional insights. The rationale for replacing FEM
and BLAU_GEN with FEM_ED, FEM_NINE and FEM_INED is
that Malaysia’s national agenda is seen to have its focal point on
increasing the number of women directors, irrespective of their
executive or non-executive roles. Perhaps more emphasis should be
given to women directors holding management positions.
Table 6 presents the multiple regression analysis using FEM_ED,
FEM_NINE, and FEM_INED. The results suggest that executive
women directors have a stronger positive influence on market
performance than independent or non-independent non-executive

Asian Journal of Business and Accounting 17(2), 2024 53

 women directors. Consistent with the main findings, ethnic diversity
and competency diversity among women directors are the primary
drivers of Tobin’s Q.

Table 6: Regression on the Effects of Types of Women

Directorship and Specific Attributes of Women Directors on Tobin’s Q

Panel A Panel B Panel C

Item Coefficient t-value Coefficient t-value Coefficient t-value
(Constant) 0.01 15.57 11.88 14.84 11.93 14.92
FEM_ED 0.01 1.80*
FEM_INED 0.00 0.72
FEM_NINE -0.00 -1.40
BLAU_ETH 0.69 2.91** 0.66 2.78*** 0.70 2.88***
BLAU_
0.60 1.36 0.63 1.44 0.68 1.54
NAT
BLAU_
0.51 2.28** 0.45 1.97** 0.48 2.12**
COM
FSIZE -0.54 -16.30*** -0.56 -15.53*** -0.55 -15.53***
BIND 0.01 4.77*** 0.01 4.23*** 0.01 4.37***
BIG4 0.04 0.23 0.04 0.27 0.04 0.26
R2 0.55 0.55 0.54
Adj R2 0.54 0.54 0.53
F-value 54.19 52.75 52.76
Significance <0.001 <0.001 <0.001
Year Yes Yes Yes
Root MSE 0.92 0.92 0.92
Breusch-
27.99 36.72 36.51
Pagan

***, **, * refer to significant levels at 1%, 5% and 10% two-tailed, respectively.
FEM_ED = Percentage of executive female directors on board; FEM_NINE = Percentage
of non-independent non-executive female directors on board; FEM_INED = Percentage of
independent female directors on board; Other variables are defined in Table 2.
N = 400

Furthermore, this study conducted additional regression analysis

on the association between board gender diversity, specific attributes
of women directors, and Tobin’s Q by partitioning the sample period
into pre- and during COVID-19, as shown in Table 7. This study
classified 2018 and 2019 as pre-COVID-19 and 2020 and 2021 as
during COVID-19 period, quite similar to Khatib and Nour’s (2021)

54 Asian Journal of Business and Accounting 17(2), 2024

 study. For the pre-COVID-19 period, female executive directors
positively influenced Tobin’s Q. As for female director attributes,
BLAU_ETH and BLAU_COM positively influenced Tobin’s Q during
COVID-19 period. For the pre-COVID-19 period, none of the diversity
of female director attributes has a significant effect on Tobin’s Q.

Table 7: Regression on the Effects of Types of Women Directorship and

Specific Attributes of Women Directors on Tobin’s Q for Pre-COVID-19 and
COVID-19 Periods

Coefficient t-value Coefficient t-value Coefficient t-value

Pre-COVID-19 (Constant) 11.33 13.34 11.65 13.69 11.68 13.71
FEM_ED 0.01 2.42*
FEM_INED 0.00 0.05
FEM_NINE -0.00 -0.52
BLAU_ETH 0.61 1.57 0.58 1.47 0.62 1.53
BLAU_NAT 1.03 1.39 0.99 1.30 1.04 1.36
BLAU_COM 0.40 1.10 0.31 0.82 0.32 0.87
FSIZE -0.52 -12.88*** -0.53 -12.89*** -0.53 -12.97***
BIND 0.01 3.81*** 0.01 3.63*** 0.01 3.56***
BIG4 -0.14 -0.62 -0.16 -0.74 -0.17 -0.75
R2 0.53 0.51 0.51
Adj R2 0.51 0.49 0.49
F-value 30.22 28.52 28.59
Significance <0.001 <0.001 <0.001
Year Yes Yes Yes
Root MSE 0.92 0.92 0.92
Breusch-Pagan 27.99 36.72 36.51
During COVID-19 (Constant) 12.01 15.31 12.14 15.93 12.22 16.03
FEM_ED 0.00 0.91
FEM_INED 0.00 1.34
FEM_NINE -0.00 -1.48
BLAU_ETH 0.76 2.17** 0.72 2.07** 0.76 2.18**
BLAU_NAT 0.68 0.07 0.14 0.19 0.19 0.25
BLAU_COM 0.05 2.04** 0.62 1.86* 0.66 1.99**
FSIZE -0.57 -15.32*** -0.58 -15.85*** -0.57 -15.79***
BIND 0.01 4.03*** 0.01 3.77*** 0.01 3.68***
BIG4 0.23 1.10 0.28 1.35 027 1.30
R2 0.59 0.60 0.60
Adj R2 0.58 0.59 0.59
F-value 40.21 40.56 40.69
Significance <0.001 <0.001 <0.001
Year Yes Yes Yes
Root MSE 0.92 0.92 0.92
Breusch-Pagan 27.99 36.72 36.51

***, **, * refer to significant levels at 1%, 5% and 10% two-tailed, respectively.
FEM_ED = Percentage of executive female directors on board; FEM_NINE = Percentage
of non-independent non-executive female directors on board; FEM_INED = Percentage of
independent female directors on board; Other variables are defined in Table 2.

Asian Journal of Business and Accounting 17(2), 2024 55

4.3 Additional Quantitative and Qualitative Analysis
Table 8 replaces the dependent variable Tobin’s Q with ROA
measured by total net income divided by total asset and ROE
measured by total net income divided by total equity.Using
accounting returns to measure firm performance yields lower
explanatory power, as compared to using Tobin’s Q, as reflected
by R2. In Panel A, the result shows theat BLAU gender diversity
positively influenced ROA, and diversity in nationality among female
directors has positive association with both ROA and ROE.

Table 8: Regression on the Association between Board Gender Diversity,

Specific Attributes of Women Directors and Accounting Returns

Model Panel A Panel B

ROA ROA ROE ROE
Item
Coef. t-value Coef. t-value Coef. t-value Coef. t-value
FEM 0.00 0.71 -0.00 -0.05
BLAU_GEN 0.09 2.05** 0.12 0.64
BLAU_ETH 0.04 1.47 0.03 1.27 -0.00 -0.05 -0.02 -0.26
BLAU_NAT 0.15 2.30** 0.15 2.28** 1.17 3.37*** 1.15 3.38***
BLAU_COM 0.01 0.47 0.00 0.00 0.09 1.27 0.06 0.86
FSIZE -0.00 -1.32 -0.00 -1.36 -0.01 -1.65* -0.01 -1.69*
BIND 0.00 1.94* 0.00 2.01** 0.00 2.47*** 0.00 2.53***
BIG4 0.01 1.22 0.01 1.38 0.04 2.26** 0.04 2.44**
(Constant) 0.05 0.18 0.04 0.37 0.21 1.88* 0.18 1.53
R2 0.08 0.09 0.17 0.17
Adj. R2 0.07 0.08 0.16 0.16
Root MSE 0.09 0.31 0.09 0.31

***, **, * refer to significant levels at 1%, 5% and 10% one-tailed, respectively.
ROA = Total net income divided by the total asset value of the company; ROE = Total net
income divided by the total equity value of the company; Other variables are defined in
Table 2.
N = 400

All interviewees know the current regulation that listed

companies in Malaysia must have at least one woman on board and
the recommended 30% of women on board. Some may support this
policy as an enabler to help women climb the corporate ladder and
reach the boardroom. However, others express that other initiatives
are more effective in achieving this objective. First of all, since there
is difficulty in finding competent women candidates with C-suite

56 Asian Journal of Business and Accounting 17(2), 2024

experience that could add value to the board, it is suggested that
the policy not only covers the board level but trickle down to the
management level where training and exposure could be given to
women and preparing them for the board, hence increasing the pool
of credible women to be elected to the board, as recommended by the
Independent Director of a telecommunication and media company
as follows:

“So, you must have women who have been in the C-suite so they can graduate
to the board. So, now, we have this slight disconnect where we have a mandate
to fill boards. However, there is a scarcity of women who have had C-suite
experience. So, we will go through a bumpy period. Moreover, that is maybe
why your data is not conclusive that women translate into better bottom line
financial results. It is because we don’t have enough women who have got the
C-suite experience who then can really truly add value, which is what has
happened in the mature markets. So, you could argue that we need to go further
than the boards. Drive it into the management.”
[Independent Director, Telecommunication & Media Company]

Secondly, regarding training and exposure to be ‘board ready’

through management position, as mentioned above, upskilling,
training and certification initiatives should be the main focus
of governing bodies to achieve diversity objectives. This is both
mentioned by the Independent Director of Plantation Company as well
as the Chief Corporate Officer of the Construction Company as follows:

“The strategy, they need to think out the strategy to achieve that policy. Look
at the current strategy, maybe it’s not enough. To re-look at the strategy, what
works, what doesn’t. It can’t remain the same. Not policy, strategy that can
promote a lot of women in the board. I’m not sure whether the trainers of board
of directors can play a bigger role in making introductions. It’s not good only
you pay them, they train you, and off you go. You can bring the certificate and
that’s it.”
[Independent Director, Plantation Company]

“Women must be board ready. It’s not something you just go into; you must
be board ready. You must understand, you know, your issues, duties. You
have to understand board governance, you know, you can’t, you know, it’s not
something you walk into.”
[Chief Corporate Officer, Construction Company]

Thirdly, to achieve the diversity objective, more demand for

women directors needs to be created by limiting the number of
years and the number of boards that a director can sit on (where
appointments in subsidiaries also have to be counted as one and not
lump together as one group of companies even though the director

Asian Journal of Business and Accounting 17(2), 2024 57

sits on ten subsidiaries within the group as it jeopardises the quality
of the director’s oversight on board matters), and restricting family
members to be appointed to the board (for family-owned companies).
This is essential to speed up the turnover of directors and ensure
there is a diverse board with healthy tension within, where directors
are not so familiar with each other that they no longer ask difficult
questions regarding critical decisions for the companies.

“So, the government has already mandated a percentage of women, right? So

what else can you really do? It is for me to increase the demand for women. So
how do you do that? Right now, you look at some boards and some directors
have been there forever, right? Singapore has just put in a new rule that says
no director can be more than 9 years, but they can become non-independent,
you can do two-tier voting to get them in. They can sit there forever. Go and
look at some of these, especially the family-owned companies. Not family-owned,
they are public listed, but they are dominated by a family. You can see all the
siblings are on the board. I mean that is not a very diverse board, right? So
again, family ties on the board maybe should be reduced. You cannot have
family members on board.”
[Independent Director, Telecommunication & Media Company]

Lastly, having a balance of women on the board of directors is

pivotal as described by Head (Group People) of Property Company,
recognising the benefits that diverse perspectives, including those of
women, can bring to decision-making processes within companies.
The interviewee also emphasises the need for creating a database
of potential women candidates for board positions for companies
to tap into a pool of talent that may have been overlooked or
underrepresented in the past. This not only benefits individual
women by providing them with opportunities for professional
advancement but also enriches the talent pool available to companies
seeking qualified board members, hence could became a catalyst in
promoting gender diversity, fostering inclusive decision-making
processes, and aligning with best practices in corporate governance
for Malaysian PLCs:

“We would like to see a lot of women to be on board as board of directors

to have a balance. When it comes to decisions, perhaps we women should
be listened to. If they make sound justification for certain projects or
certain decisions that needs to be made, I think women should be given that
opportunity. Probably for the government of the day, you know…like I said,
look at the database. It’s not the same people being elected as board of directors
A, B, C, but give that opportunity to other women. Yes. They have not been
discovered, but of course, we are very competent. So, I’m sure there are a lot
of them out there.”
[Head (Group People), Property Company]

58 Asian Journal of Business and Accounting 17(2), 2024

5. Conclusion and Implications
This study addresses a notable gap in the research on board diversity,
specifically within the context of women directors in Malaysia. While
extensive studies have been conducted on board diversity, with
a particular focus on gender diversity, there has been a dearth of
research exploring the specific attributes or characteristics of women
directors that may potentially enhance company performance. The
impetus for this study arises from the promising increase in the
presence of women directors in the Top 100 Malaysian PLCs in
recent years. In response to this trend, this research takes a more
comprehensive approach by examining the diversity of attributes
among women directors, including ethnicity, nationality and
competency. The study broadens the discourse on board diversity
by drawing on insights from an integrative multi-theory approach,
encompassing resource dependence and human capital theories.
This study contributes to the existing body of knowledge in
several ways. Firstly, the study breaks new ground by transcending
the traditional focus on the mere presence and percentage of women
directors. Previous literature predominantly revolved around these
numerical aspects. However, the study adopts Blau’s diversity
framework, scrutinising attributes like competency, ethnicity,
and nationality. Surprisingly, the study findings challenge the
conventional belief that an increased percentage of women directors
alone leads to enhanced company performance. Instead, the diversity
in attributes emerges as a driving force, highlighting the paramount
importance of the quality of women directorships.
Secondly, uniquely positioned at the intersection of quantitative
analysis and qualitative depth, the study is among the pioneers
in a dual-dimensional approach. Beyond statistical rigour, the
study engages in insightful interviews with directors and senior
managers, providing a nuanced understanding of board dynamics.
This integration of qualitative insights solidifies and enriches the
quantitative findings, offering a comprehensive and holistic view of
the intricacies within the boardroom.
The study’s implications extend beyond the boardroom,
resonating with regulators, policymakers, and companies alike. The
conventional wisdom that a higher number of women directors
directly correlates with improved company performance is dispelled.
Instead, the study urges stakeholders to focus on diversifying
attributes, particularly competency, ethnicity, and nationality among
women directors. This revelation advocates for formulating and

Asian Journal of Business and Accounting 17(2), 2024 59

implementing regulations fostering such diversity, thereby enhancing
board dynamics and fortifying company performance.
Recognising the dearth of talent pool readiness, the study
underscores the critical role of investing in training initiatives. This
goes beyond the board level, reaching senior managers. The proactive
encouragement of early training for senior managers addresses the
talent shortage and empowers women directors with essential skills.
This strategic approach aligns with the broader goal of nurturing a
pipeline of qualified individuals ready to contribute effectively at the
board level. Finally, the study proposes reviewing policies related to
directorship characteristics, including multiple directorships, long
tenure, and positions in family-owned companies. Limiting these
characteristics could help mitigate complacency and entrenchment,
potentially leading to more effective corporate governance.
Our research transcends the conventional narrative, offering a
paradigm shift in understanding the nuanced dynamics of women
directors in Malaysia. The findings contribute to academic discourse
and provide actionable insights for stakeholders to shape policies
and practices that foster genuine diversity and enhance overall
corporate performance. Furthermore, this study’s findings hold
substantial implications for key stakeholders, including regulators,
policymakers, and companies. It suggests that the mere appointment
of more women directors may not yield significant advancements in
company performance. Instead, the study emphasises the critical role
of diversifying competency, ethnicity, and nationality among women
directors to enhance board dynamics and concurrently strengthen
company performance. This insight can catalyse Malaysian regulators
and policymakers to consider implementing regulations promoting
diversity within women directors and the boardroom.
Although our findings hold up across various econometric
models, this study has certain limitations; notably, this study only
considered competency, ethnicity and nationality as the attributes
of women directors. As such, future studies may extend the female
director attributes-performance nexus by incorporating other
attributes such as age, experience, expertise and political ideologies
Moreover, future research could extend the board diversity realm by
measuring competency diversity based on the directors’ professional
certificates. Lastly, this study only used human capital and resource
dependence theories to answer the research objectives. Future
research may, therefore, rely on other theories like upper echelon and
legitimacy theory, which can provide additional insights.

60 Asian Journal of Business and Accounting 17(2), 2024

 In conclusion, this study significantly contributes to board
diversity and the role of women directors in enhancing company
performance. It underscores the need to move beyond a narrow
focus on numerical representation and instead consider the diversity
of attributes among women directors. The research offers practical
recommendations for stakeholders to improve corporate governance
and performance in the Malaysian context.

Acknowledgement
This work was supported by Universiti Utara Malaysia’s Geran
Penjanaan [Code S/O: 21364]

Appendix

INTERVIEW PROTOCOL

1. To examine the level of diversity for directorship positions in

Malaysian public listed companies.
i. What do you think about board gender diversity as a whole?
ii. What do you think about board gender diversity in your
company?
iii. Are you satisfied with the current state of your board’s
gender diversity?

2. To explain how board gender diversity attributes affect the

company performance.
i. Do you think board gender diversity could affect your
company?
ii. Could you please explain your appointment criteria to join
the BOD?

Probes: Are there any diversity/government requirements being

considered? If yes, they have a gender diversity requirement:
Is it because of the unique attributes that women and
men could offer? And to adhere to the government’s
encouragement and mandatory requirement?

iii. Do you think female and male directors are different? Why?
Give an example.
iv. What attributes do you look for in appointing women
directors? (competency, age, ethnicity, nationality)

Asian Journal of Business and Accounting 17(2), 2024 61

 v. Other than gender diversity, what are other diversity
attributes that you look for in an efficient board? E.g.,
competency, age, ethnicity and nationality (especially for
women directors)
vi. Do you think women directors influence the company’s ESG
performance and disclosure? If yes, how? Do you have any
examples?
vii. Is it hard to find a good candidate for a women’s
directorship? What is your experience with this?

3. To make recommendations to policymakers and business leaders

on setting gender diversity Guidelines based on the strengths and
weaknesses of inclusive culture.
i. If you were given a chance to make some proposals to the
government in an effort to improve women’s participation
on the decision-making level, what would that be?

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