CEO Power and Tax Avoidance in Malaysia: The Moderating Effect of Board Gender Diversity

Main Article Content

Hooy Guat-Khim
Phua Lian-Kee


This study examines the relationship between chief executive officer (CEO) power and tax avoidance and the moderating effects of board gender diversity on this relationship. Based on companies listed on the Main Market of Bursa Malaysia from 2009 to 2019, it is found that CEO power is positively associated with tax avoidance. This suggests that CEOs with more dimensions of power are more competent in reducing the firm’s tax burden. Further tests show that this positive relationship is strengthened by board gender diversity. This implies that CEO competence in tax avoidance increases as the proportion of female directors on the board increases.

Article Details

How to Cite
CEO Power and Tax Avoidance in Malaysia: The Moderating Effect of Board Gender Diversity. (2024). Asian Academy of Management Journal of Accounting and Finance, 20(1), 97-119.


Abebe, M., & Alvarado, D. A. (2013). Founder-CEO status and firm performance: An exploratory study of alternative perspectives. Journal of Strategy and Management, 6(4), 343–357.

Adams, R. B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291–309.

Adams, R. B., Almeida, H., & Ferreira, D. (2005). Powerful CEOs and their impact on corporate performance. The Review of Financial Studies, 18(4), 1403–1432.

Al Mamun, M. (2016). CEO power, governance, and tax avoidance. 2016 Financial Markets and Corporate Governance. SSRN.

Armstrong, C. S., Blouin, J. L., & Larcker, D. F. (2012). The incentives for tax planning. Journal of Accounting and Economics, 53(1–2), 391–411.

Association of Chartered Certified Accountants [ACCA]. (2021). What is a chief executive officer and what do they do? Retrieved from

Bank Negara Malaysia. (2010). Monthly statistical bulletin, December 2010. Retrieved from

Betz, M., O’Connell, L., & Shepard, J. M. (1989). Gender differences in proclivity for unethical behavior. Journal of Business Ethics, 8(5), 321–324.

Bhagat, S., Bolton, B. J., & Subramanian, A. (2010). CEO education, CEO turnover, and firm performance. SSRN.

Boussaidi, A., & Hamed, M. S. (2015). The impact of governance mechanisms on tax aggressiveness: Empirical evidence from Tunisian context. Journal of Asian Business Strategy, 5(1), 1–12.

Budi, P. N. (2019). The role of gender diversity on the board of directors and tax avoidance. Russian Journal of Agricultural and Socio-Economic Sciences, 3(87), 107–115.

Byrnes, J. P., Miller, D. C., & Schafer, W. D. (1999). Gender differences in risk taking: A meta-analysis. Psychological Bulletin, 125(3), 367–383.

Chee, S., Choi, W., & Shin, J. E. (2017). The non-linear relationship between CEO compensation incentives and corporate tax avoidance. Journal of Applied Business Research, 33(3), 439–450.

Chen, S., Chen, X., Cheng, Q., & Shevlin, T. (2010). Are family firms more tax aggressive than non-family firms? Journal of Financial Economics, 95(1), 41–61.

Cook, K. A., Huston, G. R., & Omer, T. C. (2008). Earnings management through effective tax rates: The effects of tax-planning investment and the Sarbanes-Oxley Act of 2002. Contemporary Accounting Research, 25(2), 447–471.

Derashid, C., & Zhang, H. (2003). Effective tax rates and the “industrial policy” hypothesis: Evidence from Malaysia. Journal of International Accounting, Auditing and Taxation, 12(1), 45–62.

Desai, M. A., & Dharmapala, D. (2006). Corporate tax avoidance and high-powered incentives. Journal of Financial Economics, 79(1), 145–179.

Desai, M. A., & Dharmapala, D. (2009). Corporate tax avoidance and firm value. Review of Economics and Statistics, 91(3), 537–546.

Dhaliwal, D. S., Gleason, C. A., & Mills, L. F. (2004). Last-chance earnings management: Using the tax expense to meet analysts’ forecasts. Contemporary Accounting Research, 21(2), 431–459.

Donaldson, L. (1990). The ethereal hand: Organizational economics and management theory. The Academy of Management Review, 15(3), 369–381.

Duan, T., Ding, R., Hou, W., & Zhang, J. Z. (2018). The burden of attention: CEO publicity and tax avoidance. Journal of Business Research, 87, 90–101.

Dyreng, S. D., Hanlon, M., & Maydew, E. L. (2008). Long-run corporate tax avoidance. The Accounting Review, 83(1), 61–82.

Dyreng, S. D., Hanlon, M., & Maydew, E. L. (2010). The effects of executives on corporate tax avoidance. The Accounting Review, 85(4), 1163–1189.

Eagly, A. H., & Johnson, B. T. (1990). Gender and leadership style: A meta-analysis. Psychological Bulletin, 108(2), 233–256.

Earley, P. C., & Mosakowski, E. (2000). Creating hybrid team cultures: An empirical test of transnational team functioning. The Academy of Management Journal, 43(1), 26–49.

Fetscherin, M. (2015). The CEO branding mix. Journal of Business Strategy, 36(6), 22–28.

Finkelstein, S. (1992). Power in top management teams: Dimensions, measurement, and validation. The Academy of Management Journal, 35(3), 505–538.

Graham, J. R., Raedy, J. S., & Shackelford, D. A. (2012). Research in accounting for income taxes. Journal of Accounting and Economics, 53(1–2), 412–434.

Gujarati, D., Porter, D., & Gunasekar, S. (2017). Basic econometrics (5th ed.). New York: McGraw Hill.

Gupta, S., & Newberry, K. (1997). Determinants of the variability in corporate effective tax rates: Evidence from longitudinal data. Journal of Accounting & Public Policy, 16(1), 1–34.

Hanlon, M., & Heitzman, S. (2010). A review of tax research. Journal of Accounting and Economics, 50(2–3), 127–178.

Hurst, D. K., Rush, J. C., & White, R. E. (1989). Top management teams and organizational renewal. Strategic Management Journal, 10(S1), 87–105.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.

Kagzi, M., & Guha, M. (2018). Board demographic diversity: A review of literature. Journal of Strategy and Management, 11(1), 33–51.

Kim, K. A., & Limpaphayom, P. (1998). Taxes and firm size in pacific-basin emerging economies. Journal of International Accounting, Auditing and Taxation, 7(1), 47–68.

Krishnan, H. A., & Park, D. (2005). A few good women-on top management teams. Journal of Business Research, 58(12), 1712–1720.

Lanis, R., Richardson, G., & Taylor, G. (2015). Board of director gender and corporate tax aggressiveness: An empirical analysis. Journal of Business Ethics, 144(3), 577–596.

Lazăr, S. (2014). Determinants of the variability of corporate effective tax rates: Evidence from Romanian listed companies. Emerging Markets Finance & Trade, 50, 113–131.

Lee, R. J., & Kao, H. S. (2020). The effect of CEO power on tax avoidance: Evidence from Taiwan. Global Journal of Business Research, 14(1), 1–27.

Lennox, C., Lisowsky, P., & Pittman, J. (2013). Tax aggressiveness and accounting fraud. Journal of Accounting Research, 51(4), 739–778.

McGuire, S. T., Omer, T. C., & Wang, D. (2012). Tax avoidance: Does tax-specific industry expertise make a difference? The Accounting Review, 87(3), 975–1003.

Mio, C., Fasan, M., & Ros, A. (2016). Owners’ preferences for CEOs characteristics: Did the world change after the global financial crisis? Corporate Governance: The International Journal of Business in Society, 16(1), 116–134.

Nielsen, S., & Huse, M. (2010). The contribution of women on boards of directors: Going beyond the surface. Corporate Governance: An International Review, 18(2), 136–148.

Peni, E., & Vähämaa, S. (2010). Female executives and earnings management. Managerial Finance, 36(7), 629–645.

Porcano, T. M. (1986). Corporate tax rates: Progressive, proportional, or regressive. Journal of the American Taxation Association, 7(2), 17.

Richardson, G., & Lanis, R. (2007). Determinants of the variability in corporate effective tax rates and tax reform: Evidence from Australia. Journal of Accounting and Public Policy, 26(6), 689–704.

Richardson, G., Taylor, G., & Lanis, R. (2016). Women on the board of directors and corporate tax aggressiveness in Australia: An empirical analysis. Accounting Research Journal, 29(3), 313–331.

Saidu, S. (2019). Theoretical and conceptual review of CEO power. International Journal of Academic Management Science Research, 3(2), 1–18.

Securities Commission Malaysia. (2018). Corporate governance strategic priorities 2017–2020. Retrieved from

Shackelford, D. A., & Shevlin, T. (2001). Empirical tax research in accounting. Journal of Accounting and Economics, 31(1–3), 321–387.

Shevlin, T., & Porter, S. (1992). The corporate tax comeback in 1987: Some further evidence. Journal of the American Taxation Association, 14(1), 58.

Srinidhi, B., Gul, F. A., & Tsui, J. (2011). Female directors and earnings quality. Contemporary Accounting Research, 28(5), 1610–1644.

Tien, C., Chen, C. N., & Chuang, C. M. (2013). A study of CEO power, pay structure, and firm performance. Journal of Management & Organization, 19(4), 424–453.

Zimmerman, J. L. (1983). Taxes and firm size. Journal of Accounting and Economics, 5, 119–149.