The Relationship between Female Directors and Male Muslim Directors on the Firm Performance: Evidence from Malaysia
DOI:
https://doi.org/10.37134/ibej.Vol17.2.11.2024Keywords:
Board of Directors, Corporate GovernanceAbstract
This study examines the relationship between female directors and male Muslim directors on the firm performance in Malaysia. The sample comprises of 180 listed firms in the trade and service industry in Bursa Malaysia. This study measured the firm performance using Return on Assets (ROA). This study also controlled for audit committee characteristics and board characteristics when examining the association between female directors and male Muslim directors with firm performance. The findings indicate a significant positive relationship between female directors and the firm performance. The Ordinary Least Square (OLS) regression also demonstrated a complementary relationship between female directors, male Muslim directors, and the firm performance, thus suggesting a positive interaction between the variables. This study deduces that female directors are able to perform their monitoring roles effectively in improving the firm’s performance, especially when they are accompanied by male Muslim directors. This finding provides supporting evidence for the appointment of 30% of female directors in the listed firms in Malaysia at the beginning of 2016. The finding of this study is significant for the policymakers to justify the need to increase future woman's involvement in becoming part of the firm's board members.
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