Assessing the governance mechanisms, corporate social responsibility and performance: The moderating effect of board independence
This article serves two purposes. First, it attempts to examine the joint impact of corporate governance mechanisms and corporate social responsibility (CSR) practice on firm performance. Second, the moderating role of board independence is investigated on 588 non-financial Malaysian firms listed on...
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my.uum.repo.278002020-10-27T01:20:33Z http://repo.uum.edu.my/27800/ Assessing the governance mechanisms, corporate social responsibility and performance: The moderating effect of board independence Karim, Sitara Abdul Manab, Norlida Ismail, Rusmawati HD28 Management. Industrial Management This article serves two purposes. First, it attempts to examine the joint impact of corporate governance mechanisms and corporate social responsibility (CSR) practice on firm performance. Second, the moderating role of board independence is investigated on 588 non-financial Malaysian firms listed on Bursa Malaysia during the period 2006–2017. Both accounting-based return on assets (ROA) and market-based (Tobin’s Q) performance measures have been used for measuring performance. Dynamic model using Generalized Method of Moments (GMM) has been employed on the data set to control for potential endogeneity, reverse causality and dynamic heterogeneity. Findings indicate that ROA is a better determinant of firm performance than Tobin’s Q, where ownership concentration, managerial ownership and money spent on CSR negatively affect ROA; however, an insignificant relationship is observed with Tobin’s Q. Finally, board independence negatively moderates governance-CSR and firm performance relationship. Findings of this article have implications for Bursa Malaysia and Securities Commission Malaysia to reset the limit of independent directors on board so that their unnecessary interference in operations of management may be avoided. Furthermore, companies need to reassess their CSR strategies whether they are spending on CSR activities or hiding their financial malfeasance in the name of money spent on CSR. Sage Journal 2020 Article PeerReviewed application/pdf en http://repo.uum.edu.my/27800/1/GBR%202020%201%2013.pdf Karim, Sitara and Abdul Manab, Norlida and Ismail, Rusmawati (2020) Assessing the governance mechanisms, corporate social responsibility and performance: The moderating effect of board independence. Global Business Review. pp. 1-13. ISSN 0972-1509 http://doi.org/10.1177/0972150920917773 doi:10.1177/0972150920917773 |
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HD28 Management. Industrial Management Karim, Sitara Abdul Manab, Norlida Ismail, Rusmawati Assessing the governance mechanisms, corporate social responsibility and performance: The moderating effect of board independence |
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This article serves two purposes. First, it attempts to examine the joint impact of corporate governance mechanisms and corporate social responsibility (CSR) practice on firm performance. Second, the moderating role of board independence is investigated on 588 non-financial Malaysian firms listed on Bursa Malaysia during the period 2006–2017. Both accounting-based return on assets (ROA) and market-based (Tobin’s Q) performance measures have been used for measuring performance. Dynamic model using Generalized Method of Moments (GMM) has been employed on the data set to control for potential endogeneity, reverse causality and dynamic heterogeneity. Findings indicate that ROA is a better determinant of firm performance than Tobin’s Q, where ownership concentration, managerial ownership and money spent on CSR negatively affect ROA; however, an insignificant relationship is observed with Tobin’s Q. Finally, board independence negatively moderates governance-CSR and firm performance relationship. Findings of this article have implications for Bursa Malaysia and Securities Commission Malaysia to reset the limit of independent directors on board so that their unnecessary interference in operations of management may be avoided. Furthermore, companies need to reassess their CSR strategies whether they are spending on CSR activities or hiding their financial malfeasance in the name of money spent on CSR. |
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Article |
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Karim, Sitara Abdul Manab, Norlida Ismail, Rusmawati |
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Karim, Sitara Abdul Manab, Norlida Ismail, Rusmawati |
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Karim, Sitara |
title |
Assessing the governance mechanisms, corporate social responsibility and performance: The moderating effect of board independence |
title_short |
Assessing the governance mechanisms, corporate social responsibility and performance: The moderating effect of board independence |
title_full |
Assessing the governance mechanisms, corporate social responsibility and performance: The moderating effect of board independence |
title_fullStr |
Assessing the governance mechanisms, corporate social responsibility and performance: The moderating effect of board independence |
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Assessing the governance mechanisms, corporate social responsibility and performance: The moderating effect of board independence |
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assessing the governance mechanisms, corporate social responsibility and performance: the moderating effect of board independence |
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Sage Journal |
publishDate |
2020 |
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http://repo.uum.edu.my/27800/1/GBR%202020%201%2013.pdf http://repo.uum.edu.my/27800/ http://doi.org/10.1177/0972150920917773 |
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