Board diversity and value creation for business sustainability
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Keywords

Agency theory, Board diversity, Business sustainability, R&D investment, Resource-based-view theory, Value creation.

How to Cite

Ismail, A. M., & Ali, A. A. M. (2024). Board diversity and value creation for business sustainability. Journal of Asian Scientific Research, 14(1), 81–98. https://doi.org/10.55493/5003.v14i1.4993

Abstract

The primary objective of a firm is not the creation of profit; it is the creation of value for shareholders. Corporations need to be innovative to create value, and this entails the need for corporations to embark on research and development (R&D) endeavors. This study’s objective is to determine the impact of Malaysian publicly listed companies’ board diversity (qualification, gender, and age) on the intensity of companies’ R&D investment. In conjunction with the 2017 Malaysian Code on Corporate Governance’s, which took on a new approach that promotes board diversity in corporate governance culture, samples were selected from the Minority Shareholders Watch Group ’s Malaysia: List of Top 100 Companies Overall CG & Performance (By Rank) from 2017-2019, which portrayed good corporate governance practices. The agency theory and the resource-based view were integrated to explain the effects of board diversity on R&D investment. Tests and analysis were conducted, and the results indicated that only age diversity had a positive influence on R&D investment. Practitioners could use the findings of this study to choose the ideal board composition for a company looking to gain a competitive edge. Regulators could also use this study to develop good corporate governance procedures for Malaysian publicly traded companies. The findings of this study may not truly portray the overall industries listed in Bursa Malaysia, as the samples used were limited and the data of certain companies was unavailable.

https://doi.org/10.55493/5003.v14i1.4993
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