Corporate board diversity, corporate social responsibility and financial performance: the case of Malaysian public listed companies

Abstract

This study attempts to examine the relationship between board diversity and financial performance with the mediating effect of corporate social responsibility (CSR). A total of 101 companies from different sectors, excluding the financial sector are listed in the main market of Bursa Malaysia was selected as a sample. This study used secondary data which was extracted from the annual report of the financial year ending in 2016. The results showed that board diversity is significantly related to CSR, followed by financial performance. In particular, board education diversity is found to have a positive and significant relationship with CSR. Meanwhile, board ethnicity diversity is found to be significant but negatively related to CSR. This study can bring awareness of the important and positive roles of CSR towards financial performance as a mediator to firms in Malaysia.