Economics, Finance and Statistics (ICEFS) 2(1) (2018) 17-23 Cite The Article: H.N. Auyong , B.S.S. Tan (2018). The Role Of Women Directors On Corporate Boards And Firm Financial Performance In Malaysia . Economics, Finance and Statistics, 2(1) : 17-23. ARTICLE DETAILS Article History: Received 12 November 2017 Accepted 12 December 2017 Available online 1 January 2018 ABSTRACT Malaysia's Labour Force Participation Rate is at 67.8 % in June 2017 with the female labour participation rate at 54.3%. The target of Malaysia is to have women’s representation of 30% in senior decision-making positions and on boards by 2016 as to accelerate the development of high-potential women leaders in the labour market and in decision-making positions across all industry sectors and business functions. The purpose of this paper is to look at various facets of corporate governance, notably the effectiveness of boards of directors and the composition of boards. In this context, the current study gauges the effects of women directors regarding firm performance issues and the benefits of female representation on boards. The research purpose is to examine the effect of board gender diversity and independence on firm performance in Malaysia’s listed companies in consumer products and properties sectors covering a 10-year period from 2007 to 2016. This study also examines number of female and directors affecting the firm performance in terms of Return on Asset (ROA) and Return on Equity (ROE) specifically in two sectors which is consumer products and properties. Quantitative data was collected from the Bloomberg website and annual reports of the public listed companies in Bursa Malaysia. Board Gender diversity was found to be positively related to the firm performance. However, independent director is found insignificant to firm performance. The findings may provide some implications for future research regarding the effectiveness of board of directors towards firm performance. Nevertheless, the finding may not reflect the true picture since the percentage of female directors quite constant in Malaysia. It is recommended to promote gender equality in terms of recruiting women into the corporate board and increase the participation of women in the labour force. KEYWORDS Board of Directors, Female Directors, Public Listed Companies, Return on Asset (ROA) and Return on Equity (ROE). 1. INTRODUCTION This introductory renders an overview of the research. The aim of the study is to examine the effect of board gender diversity on firm performance in Malaysia’s listed companies in consumer products and properties sectors. This study also examines the number of female directors affecting the firm performance in terms of Return on Asset (ROA) and Return on Equity (ROE) in order to give a clear picture of involving female leaders will eventually improve the organization performance. In today’s corporate world, gender diversity has fast becoming an emerging issue. According to Matt Sheehan in The World Post, Jack Ma stated that women executives are Alibaba’s Special Sauce; over 40% of all its employees are women, even the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Chief Procurement Officer (CPO) are women. Women make up nearly 34 % of the company’s high-level managers and one-third of its founders thus this made the leadership team in Alibaba balance, it is all about gender equality. In the Global Gender Gap Report 2016, Iceland is ranked at the first followed by Finland and Norway. Based on a study, women occupied on average only 19% of corporate board seats and 14% of senior executive positions in the top 600 largest companies in Europe [1]. According to the women and equalities minister, Nicky Morgan, only 25% of the Financial Times Stock Exchange (FTSE) 100 directors are female, which indicates that the high rank still male dominated [2]. According to research, percentage of women as audit and remuneration committee is greater as compared to board chairs and remuneration committee [3]. Study showed Asian women are still underrepresented in corporate boards mainly due to family pressures or commitments outside of work and workplace culture that are not actively foster gender diversity and equality [4]. According to Deloitte Southeast Asia Centre for Corporate Governance Leader, the percentage of women occupying board seats in Asia (7.8%) is improving but the pace of change is still slow compared to global statistics (14.5% in North America, 22.6% in Europe) [5]. The target of Malaysia is to have women’s representation of 30% in senior decision-making positions and on boards by 2016 as to accelerate the development of high-potential women leaders in the labor market and in decision-making positions across all industry sectors and business functions [6]. However, Malaysia has only achieved 10.7% across all public listed companies (PLCs) and 14% for the Top 100 companies by market capitalisation according to Bursa Malaysia [6]. 1.2 Problem Statement Percentage of women in the board of directors is usually lesser than men as men are known to be the decision maker from the olden times until today. Based on research, women remain under-represented in top leadership positions in American corporations, causing the glass ceiling exists that creates invisible barriers to women’s ascension to senior management and board position [7,8]. Under the 11th Malaysia Plan, the government has emphasized the need to raise the labor force participation Economics, Finance and Statistics (ICEFS) DOI : http://doi.org/10.26480/icefs.01.2018.17.23 THE ROLE OF WOMEN DIRECTORS ON CORPORATE BOARDS AND FIRM FINANCIAL PERFORMANCE IN MALAYSIA H.N. AuYong*, B.S.S. Tan Department of Economics, Faculty of Business and Finance, Universiti Tunku Abdul Rahman, 31900 Kampar, Perak, Malaysia *Corresponding Author’s E-mail: auyonghn@utar.edu.my This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.