Female CEOs and Cash Holdings: The Moderating Role of Corporate Governance and CEO Power – Empirical Evidence from Listed Companies in Malaysia
Keywords:
Cash holding, Female CEO, Board governance, CEO powerAbstract
This study examines the impact of female CEOs on corporate cash holdings in listed Malaysian firms, addressing mixed findings on gender diversity in financial management. Drawing from Upper Echelons and Agency Theories, the hypothesis is that female CEOs hold less cash, with this effect moderated by corporate governance and CEO power. The study analyses 246 publicly listed firms in Bursa Malaysia from 2009 to 2019, using 5,689 firm-year observations. Financial data were sourced from DataStream, and governance and CEO profile data were manually collected from annual reports. Panel regression analysis was employed to test the hypotheses, controlling for firm size, performance, leverage, and market-to-book value. Governance variables (board independence, size, and female representation) and CEO power dimensions (founder status, duality, tenure, ownership, multiple directorships, and education) were examined as moderators. The results show that female CEOs are associated with lower cash holdings, with board independence mitigating and female board amplifying this effect. CEO power, such as multiple directorships and postgraduate education, also influences cash holdings, with experienced and educated female CEOs holding more cash. The findings highlight the complex role of gender diversity, governance, and CEO power in shaping financial strategies, offering insights for corporate governance improvements and policy considerations.
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