Do Board Size, Female Directors and Ownership Dispersion Influence Financial Performance of Cooperatives? An Analysis Using Upper Echelons Theory

Kamaruzzaman Muhammad, Erlane K. Ghani, Azleen Ilias, Mohd Adha Ibrahim, Nurul Nazlia Jamil, Nazratul Aina Mohamad Anwar and Fazlida Mohd Razali
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Kamaruzzaman Muhammad: Faculty of Accountancy, Universiti Teknologi MARA Cawangan Selangor, Malaysia
Erlane K. Ghani: Faculty of Accountancy, Universiti Teknologi MARA Cawangan Selangor, Malaysia
Azleen Ilias: College of Business and Administration, Universiti Tenaga Nasional, Malaysia
Mohd Adha Ibrahim: Faculty of Economics and Business, Universiti Sains Islam Malaysia, Malaysia
Nurul Nazlia Jamil: Faculty of Economics and Business, Universiti Sains Islam Malaysia, Malaysia
Nazratul Aina Mohamad Anwar: Faculty of Economics and Business, Universiti Sains Islam Malaysia, Malaysia
Fazlida Mohd Razali: Accounting Research Institute, Universiti Teknologi MARA, Malaysia

International Journal of Economics and Financial Issues, 2024, vol. 14, issue 5, 1-9

Abstract: This study employs the upper echelons theory to examine the factors that influence the financial performance of cooperatives in Malaysia. Specifically, three factors are selected in this study, namely board size, female directors, and ownership dispersion, in relation to the financial performance of the cooperatives in Malaysia. In this study, a content analysis was performed on 145 cooperatives’ annual reports. This study shows that the number of board members has no effect on the financial performance of the cooperatives, indicating that a small board with knowledgeable members can also outperform a larger board with less expertise. This study also shows that female directors do no impact on the financial performance of cooperatives. Finally, this study demonstrates that the disbursement of members in the cooperatives has no effect on their financial performance. The findings in this study provide a relevant perspective on the financial performance of cooperatives that can help regulators understand and provide proper guidance to the cooperatives. This study also provides empirical evidence on the relationship between board size, female directors, ownership dispersion, and the financial performance of the co-operatives, adding to the financial reporting literature.

Keywords: Board Size; Female Directors; Member Size; Upper Echelons Theory; Financial Performance (search for similar items in EconPapers)
JEL-codes: G39 G40 (search for similar items in EconPapers)
Date: 2024
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