Citation

Johari, Haslin and Jaffar, Nahariah and Mohd Faizal, Sellywati (2022) Gender Board Heterogeneity of PN17 Companies on Bursa Malaysia. In: Postgraduate Social Science Colloquium 2022, 1 - 2 June 2022, Online.

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Abstract

Background - Bursa Malaysia classifies companies in financial distress that do not warrant continued listing on the Main Market as Practice Note 17 (PN17) companies. PN17 companies that do not comply with paragraph 8.04 and PN17 of the Main Market Listing Requirements can be suspended, de-listed or both. Prior studies found corporate governance weakness to be one of the main factors of financial distress. Different sectors are also found to have different corporate governance disclosure levels. Malaysian Code of Corporate Governance 2021 (MCCG 2021) prescribes board diversity which includes gender diversity. This study employs Blau index to measure the board gender heterogeneity of the PN17 companies across different sectors and suspension status. Purpose - The purpose of the study is to determine the board gender heterogeneity of PN17 companies. The study also aims to investigate whether there is a difference in board gender heterogeneity across the sectors. Finally, the study investigates the impact of sector and suspension status on board gender heterogeneity. Design/methodology/approach - The population consists of 21 companies classified under PN17 of the Main Market Listing Requirements as on 31 December 2021. One company is excluded as it has been liquidated and has not released its annual report for the year 2021. The remaining 20 companies are classified across seven sectors in Bursa Malaysia. The board gender heterogeneity is calculated using the Blau index based on the number of male and female directors disclosed in the annual reports for year 2021. Blau index sets the board gender heterogeneity to be most diverse at 50%. Findings/Expected Contributions - Most of the companies are from the energy sector (25%) and the industrial products and services sector (25%). This is followed by the consumer products and services (20%), property (10%), transportation and logistics (10%), technology (5%), and telecommunications and media (5%) sectors. Only 20% of the companies are suspended and the remaining 80% of the companies are still trading on the Main market under the monitoring of Bursa Malaysia. This study found that the mean score of board gender heterogeneity is 19.4% out of the maximum Blau Index gender heterogeneity of 50%. Majority (35%) of the 20 listed companies classified under PN17 have zero Blau index board gender heterogeneity in 2021. Only one company (5%) has maximum gender heterogeneity of 50%. A one-way between-groups analysis of variance revealed that the mean of board gender heterogeneity is different for the seven different sectors (p=0.1). A two-way between group analysis of variance also shows a significant difference in the effect of sector on board gender heterogeneity for suspended companies and non-suspended companies (p= 0.03). There is a statistically significant main effect for sectors (F(1,10)=4.98, p=0.03), with a medium effect size (partial eta squared = 0.69). Research limitations - The population of the study is limited to listed companies classified under PN17 as on 31 December 2021 only. Data of PN17 companies across a few years could provide different findings. The population of this study comprises of PN17 companies that are still trading and suspended. Future studies could focus on suspended companies only. Originality/value - This study addresses the board gender heterogeneity of PN17 companies. The board gender heterogeneity is calculated using Blau index which measures gender heterogeneity for the board as a group compared to using dummy variable to indicate the presence of a female director or by calculating percentage of female directors on the board.

Item Type:	Conference or Workshop Item (Paper)
Uncontrolled Keywords:	PN17 companies, gender heterogeneity, sectors, Blau index
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD101-1395.5 Land use. Land tenure
Divisions:	Faculty of Management (FOM)
Depositing User:	Ms Rosnani Abd Wahab
Date Deposited:	16 Aug 2022 06:37
Last Modified:	16 Aug 2022 06:37
URII:	http://shdl.mmu.edu.my/id/eprint/10402

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