Ownership Structure, Board Diversity and Firm Performance: A Moderated Mediation Approach

Abstract

This study examines how ownership structure influences firm performance in Malaysia’s manufacturing sector, focusing on the mediating role of board gender diversity and the moderating effect of board independence. Using panel data from 2015–2023 for public-listed manufacturing companies, the study investigate institutional, family, and managerial ownership impacts on performance (measured by ROA, ROE, and Tobin’s Q). The Malaysian context of concentrated family ownership and evolving corporate governance norms provides a rich setting. The study employs panel regression analyses and a moderated mediation framework. The results indicate that institutional ownership is positively associated with firm performance, whereas family and managerial ownership show negative effects. Board gender diversity emerges as a positive predictor of performance, mediating part of the ownership–performance relationship. Notably, board independence strengthens the performance impact of board diversity – firms with more independent boards derive greater performance gains from diverse boards. This suggests a moderated mediation: ownership influences performance through diversity, conditional on independent board oversight. The findings underscore the business case for improving board diversity and maintaining strong independent director presence. The study contributes to corporate governance literature by integrating ownership structure, diversity, and independence in a single framework, and the study offer practical recommendations for regulators and firms to enhance governance structures for better performance.