Boards and Value Creation: Unveiling the Drivers of Corporate Reputation

Allezawati binti Ismail, Aida Maria binti Ismail and Rizwana binti Md Yusof
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Allezawati binti Ismail: Faculty of Accountancy, Universiti Teknologi MARA, 40450 Shah Alam, Selangor, Malaysia
Aida Maria binti Ismail: Faculty of Accountancy, Universiti Teknologi MARA, 42300 Bandar Puncak Alam, Selangor, Malaysia
Rizwana binti Md Yusof: Faculty of Accountancy, Universiti Teknologi MARA, 42300 Bandar Puncak Alam, Selangor, Malaysia

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 2, 1592-1605

Abstract: This research examines the relationship between board characteristics, specifically board size and board gender diversity, and value creation, measured through corporate reputation. It employs Resource-Based Theory (RBT) and Upper Echelons Theory (UET) as the theoretical framework. While prior studies emphasize the strategic role of governance attributes in corporate performance, their impact on corporate reputation remains inconclusive. Addressing this gap, the research focuses on Consumer Product and Service sector firms listed on Bursa Malaysia from 2018 to 2022. Data were collected from annual reports and integrated report, covering 145 firms over five years. The analysis, conducted using the Statistical Package for the Social Sciences (SPSS), examines the direct effects of board size and board gender diversity on corporate reputation. The findings indicate that larger boards positively influence corporate reputation, supporting RBTs view that governance attributes serve as strategic resources. The results align with UET, which posits that firm performance is shape by strategic decisions influence by the backgrounds and characteristics of top-level management. However, the relationship between board gender diversity and corporate reputation was weak and statistically insignificant, suggesting the need for further exploration. Additionally, a negative association between board size and board gender diversity suggests a broader governance trend where larger boards tend to have lower gender diversity. This underscores the importance of understanding the factors influencing boardroom diversity. This research contributes to the corporate governance (CG) literature by demonstrating the strategic role of board composition in shaping reputation. The practical implications of this research include guiding firms toward leveraging effective governance practices to enhance their competitive advantage. Future studies are encouraged to adopt longitudinal designs, explore additional governance attributes, and examine mediating factors such as corporate social responsibility (CSR) and sustainability activities to provide a more comprehensive understanding of these relationships.

Date: 2025
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