Corporate Governance Reform On Board Gender Diversity And Firm Performance: A Natural Experiment Approach
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Date
2020-01
Authors
Wong, Kah Yun
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
In 2017, Securities Commission of Malaysia has issued a revised code of corporate governance, that is Malaysia Code of Corporate Governance 2017 (MCCG 2017), and one of the changes is that large companies are made compulsory to have 30% gender quota in the board of directors with effect from financial year ending 31 December 2017. Due to the announcement comes as a ‘shock’ to the affected companies, this study uses natural experiment approaches to investigate the impact of the issuance and implementation of gender quota on firm performances. This study examines 570 firms from Bursa Malaysia as the ‘treatment’ group and 265 firms from Singapore Exchange as the ‘control’ group for the period of 2014 to 2018. This research found positive relationship between the additional of percentage of female directors in the board of directors after the quota to the firms’ performances. Besides that, female directors’ involvement in board committees after the gender quota also brings positive effect to the firms’ performances.
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Keywords
Management