A Conceptual Framework of Board Gender Diversity and Firm Performance: The Role of Innovation as Moderator

This conceptual paper develops a framework to explain the relationship between board gender diversity and firm performance in Malaysian public-listed Government-Linked Companies (GLCs). Drawing solely on the underlying doctoral thesis, the paper argues that board gender diversity is an important corporate governance mechanism that enhances firm performance by improving monitoring, strategic decision-making, and governance quality. The framework further conceptualises innovation as both a mediating and moderating mechanism that strengthens the ability of board gender diversity to translate diverse perspectives into superior financial outcomes. In addition, institutional ownership is positioned as a mediating variable that reinforces governance effectiveness by enhancing oversight, accountability, and long-term strategic alignment in GLCs. The proposed conceptual model addresses inconsistencies in prior findings by clarifying the internal mechanisms and ownership structures that condition the board gender diversity–firm performance relationship within the unique institutional setting of Malaysian GLCs. This paper provides policymakers, regulators, and corporate leaders with meaningful insights on strengthening governance practices and firm performance through gender-inclusive board structures.