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The Impact of Board Characteristics on Co-operative Reputation From the Lense of Resource-Based View Theory (RBVT)

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  • Aida Maria Ismail
  • Siti Muliyana Ahmadi
  • Normahiran Yatim
  • Puteh Mariam Ismail

Abstract

Numerous studies on corporate governance proposed the connection of boards¡¯ characteristics on firm performance and reputation. However, the results are mixed and limited research in the co-operatives context has creates a great interest to fill the conspicuous gap. This study seeks to examine the potential relationship between board characteristics and co-operative reputation in Malaysia from the perspective of resource-based view theory (RBVT). Hence, multiple regressions were conducted to analyze the relationship between co-operatives reputation with the respect of Top 100 Co-operatives Index and board characteristics in terms of board size, ethnic diversity, gender diversity, age diversity and education diversity in this study. The sample is composed of 61 listed co-operatives in the Top 100 Co-operatives Index for the three-consecutive year during the period 2015 to 2017. Reputation data were obtained from Top 100 Co-operative Index that published at Malaysia Co-operative Societies Commission (MCSC) website. While, the data of board characteristics and co-operative size on log of total assets which lagged by a year were extracted from MCSC¡¯s INFOKOP system that provides both financial and non-financial data. The results found that Malaysian co-operatives that appear high up in terms of ranking in the reputation MCSC index tend to have a greater proportion of high educational directors on their board. Other board characteristics including board size, ethnic diversity, gender diversity and age diversity were not associated with the reputation of co-operatives. This generally can be explained that different types of law, geography, historical background, cultural environment and other factors may affect composition and diversity; and particularly the board in co-operative societies. Findings of this study provide insights into potential strategies in relation to corporate governance towards improving co-operative¡¯s values and indirectly help the government in achieving the national economic goals.

Suggested Citation

  • Aida Maria Ismail & Siti Muliyana Ahmadi & Normahiran Yatim & Puteh Mariam Ismail, 2020. "The Impact of Board Characteristics on Co-operative Reputation From the Lense of Resource-Based View Theory (RBVT)," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(3), pages 43-61, June.
    • Handle: RePEc:jfr:ijfr11:v:11:y:2020:i:3:p:43-61
    DOI: 10.5430/ijfr.v11n3p43
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    References listed on IDEAS

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    1. Fama, Eugene F & Jensen, Michael C, 1983. "Agency Problems and Residual Claims," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 327-349, June.
    2. Michael C. Jensen, 2010. "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 43-58, January.
    3. Stephen Brammer & Andrew Millington & Stephen Pavelin, 2007. "Gender and Ethnic Diversity Among UK Corporate Boards," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 393-403, March.
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    1. Bogdan Aurelian Mihail & Carmen Daniela Micu, 2021. "The Influence of the Independent Non-Executive Board Members on the Financial Performance of the Companies Listed in the Bucharest Stock Exchange," JRFM, MDPI, vol. 14(10), pages 1-14, October.

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