Shamsul Nahar Abdullah

Does Having Women on Boards Create Value? The Impact of Societal Perceptions and Corporate Governance in Emerging Markets

Many governments seek to impose gender equality on boards, but the consequences of doing so are not clear and could harm firms and economies. We shed light on this topic by conceptualizing the relationships as firm- and board-specific and embedded within specific contexts. The theory is developed with reference to emerging markets, and tested on Malaysian firms. We find that female directors create value for some firms and decrease it for others. The impact varies across different performance indicators, firms’ ownership and boards’ structure. The findings call for nuanced responses in relation to women’s nominations from both governments and firms.

Women on Boards of Malaysian Firms: Impact on Market and Accounting Performance

We seek to offer some reconciliation for the conflicting theoretical arguments and empirical findings regarding the impact of women’s participation in boards on firms’ performance. We suggest that this impact differs in relation to market- and accounting-performance, and it is firm-specific, and varies by firms’ ownership type and the composition of their boards. These arguments find theoretical underpinnings in agency and resource-dependency theories, combined with behavioral and discrimination theories that articulate women behavior in the workplace and market perception of gender equality. The empirical analysis is based on a dataset of 841 publicly-listed firms in Malaysia. The results show positive impact of women’s participation on accounting-performance and negative impact on market-performance, suggesting that women directors create economic value, which is undervalued by the market. We interpret the findings with reference to the perception of women’s role in society and business in Malaysia, and the nature of corporate governance and ownership types prevalent among Malaysian firms. We suggest that the relationships might be context-specific, and hence the desired level of women’s participation varies across countries. We discuss the normative implications of the findings for government authorities considering legislation of gender-quota on boards, and for firms.

Women directors, family ownership and earnings management in Malaysia

Purpose - The purpose of this paper is to determine whether the representation of women on the boards (WOMBDs) and audit committees is associated with a reduction in the practice of earnings management and whether women are associated with income reducing (conservative) rather than income-increasing (aggressive) earnings management. The authors further argue that family ownership moderates the relationship between the presence of WOMBDs and audit committees and earnings management. Design/methodology/approach - The study uses non-finance firms listed on Bursa Malaysia over a period of four years, i.e. from 2008 until 2011. Findings - The evidence reveals that the presence of WOMBD or audit committee is not associated with a propensity for earnings management. In addition, the evidence also reveals that family ownership does not interact either with WOMBD or with women on the audit committee (WOMAC) to influence the propensity for earnings management. Nevertheless, the additional analyses show that, while women on boards are not associated with income-decreasing accruals, the presence of women on audit committees leads to income-reducing earnings management. The evidence further reveals that family ownership does not interact with either WOMBD or WOMAC to influence income-decreasing earnings management. Originality/value - This study extends prior research on the role of women directors and women audit committee members on earnings management focussing on family ownership. Further, the study also examines the direction of earnings management as opposed to the most prior studies, which mainly focus on the propensity of earnings management.