Board diversity and tax planning in the context of Malaysian listed firm

A diversified board is increasingly essential for employee productivity and achievement. This study examines board diversity tax planning in Malaysian listed firms. The sample consists of 394 listed firms in Bursa Malaysia from 2014 to 2016. All the independent data, such as board gender, age, educational level, board size, board independence, and duality, are collected from annual reports. Effective tax rates (ETR), as a tax planning proxy, and control variables are collected from DataStream. The regression results show that board gender has a positive relationship with tax planning, while board independence has a negative one. Other independent variables such as age, educational level, board size, and duality have an insignificant relationship with tax planning. This study concludes that having females on the board encourages tax planning strategy within the firm and raises awareness towards minimising tax burdens. Less tax planning by independent directors could arise due to a lack of supervision and presence in deciding independent considerations in tax planning. The implementation of gender diversity in firms can affect tax management performance. For future research, this study recommends using actual data on tax planning expenditure that could give a more accurate effect of board diversity toward tax planning.