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An investigation into the remuneration–CSR nexus and if it can be affected by board gender diversity

Sitara Karim (School of Economics, Finance and Banking, College of Business, Universiti Utara Malaysia, Sintok, Malaysia)

Corporate Governance

ISSN: 1472-0701

Article publication date: 11 January 2021

Issue publication date: 26 May 2021




This study aims to investigate the relationship between remuneration packages [chief executive officer (CEO) and director] and independent corporate social responsibility (CSR) practices (marketplace, environment, community, workplace and money spent on CSR) of 588 Malaysian listed firms during 2006–2017. Further, the study explored the moderating effect of board gender diversity on the remuneration-CSR nexus.


The dynamic estimator; namely, the system generalized method of moments given by Arellano and Bover (1995) has been used on the data set to control dynamic endogeneity, unobserved heterogeneity and simultaneity problems.


Findings indicate a weak relationship between remuneration and CSR where prior CEO remuneration negatively influences marketplace activities, environment-related activities and workplace practices. However, directors’ remuneration leaves no effect on socially responsible activities. Moreover, board gender diversity negatively moderates the CEO remuneration-CSR relationship and an insignificant moderating effect has been observed for directors’ remuneration-CSR nexus.

Practical implications

This study is particularly significant for regulatory bodies of Malaysia e.g. Securities Commission Malaysia, Bursa Malaysia, policymakers, investors and managers. For academia, this study fetches support from agency theory and overinvestment hypothesis to explain the relationships.


This paper is novel in providing empirical evidence on the moderating effect of board gender diversity on the relationship between remuneration and independent CSR activities for the first time. Moreover, this study has sourced several theoretical and practical implications. Then, the study uses a dynamic estimator that caters to the problems of endogeneity, simultaneity and heterogeneity.



Karim, S. (2021), "An investigation into the remuneration–CSR nexus and if it can be affected by board gender diversity", Corporate Governance, Vol. 21 No. 4, pp. 608-625.



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