Women Directors’ Specific Attributes and Company Performance: Insights from a Mixed Method Study in Malaysia

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 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.