Board Diversity and Executive Compensation: A Concept Paper
DOI:
https://doi.org/10.37134/ibej/Vol.16.2.3.2023Keywords:
Board Diversity, Executive Compensation, Emerging EconomyAbstract
This study proposed the examination of the impact of board diversity on executive compensation in emerging economies such as Malaysia. Diversity of board has been promoted in the Malaysian Code on Corporate Governance (MCCG, 2021) and the implementation of such policy is costly to the firms. Excessive executive compensation has been one of the main problems in the corporate world in Malaysia. While the cost and benefit effects of diversity in the context of an emerging economy are not clear, the diversity in the board that seems to work well in the Western business culture might not necessarily be compatible with Malaysian culture, where the traditional values, culture, and religions are being adhered. The sample is comprised of listed firms in Malaysia during the year 2021 to 2023. Board diversity is measured using gender diversity, age diversity, and ethnicity diversity. The executive compensation is measured using the total compensation received by the board of directors. It is expected that the outcome of this study will be useful in helping the policymakers in setting the parameters for the diversity policy in the firms in Malaysia.
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Copyright (c) 2023 Anis Zaireen Azlani, Nooraisah Katmon, Nor Hanani Ahamad Rapani, Norimah Rambeli, Zam Zuriyati Mohamad, Mohd Norullah Ab Razak
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