Independent female directors and integrated reporting quality: The moderating role of family ownership

Abstract

Female directors can affect corporate reporting through their monitoring functions. However, it is unclear whether independent female directors (IFDs) are preferred to gain a higher quality of integrated reporting (IRQ) in a context such as Malaysia, where family ownership is dominated. This study examines the relationship between IFDs and IRQ, as well as the influence of family ownership on the IFDs‐IRQ nexus. Using all Malaysian public listed companies that have voluntarily adopted IR strategy over the 2017–2021 period, the current study uses different regression models to analyze the data and provide robust results. The results find that IFDs are positively associated with IRQ. Additionally, there is a significant negative correlation between family ownership and IRQ. Furthermore, family ownership negatively moderates the positive IFDs‐IRQ relationship. The results of the subsample analysis indicate that the relationship between IFDs and IRQ is positive in companies that do not have family ownership, but negative in those that do have family ownership. This finding supports the main conclusion regarding the moderating impact of family ownership. The additional analyses support the primary findings that highlight the crucial function of IFDs in enhancing IRQ and the influence of family ownership in attenuating the favorable impact of IFDs. This research extends the existing body of literature on IR by examining the significance of female independence beyond female representation and exploring the potential impact of family ownership on this advantageous characteristic.