The impact of board characteristics on co-operative reputation from the lense of resource-based view theory (RBVT)

• Published in: International Journal of Financial Research
• Main Author: 2-s2.0-85088790794
• Format: Article
• Language: English
• Published: Sciedu Press 2020
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85088790794&doi=10.5430%2fijfr.v11n3p43&partnerID=40&md5=3bcefd782e7f36bc6cc62f35389f424d

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. © 2020, Sciedu Press.