EMPIRICAL RELATIONSHIP BETWEEN GOVERNANCE AND FINANCIAL PERFORMANCE OF KOOP SAHABAT

Abstract

This study investigates the relationship between governance practices and financial performance at Koperasi Sahabat Amanah Ikhtiar Malaysia (Koop Sahabat) Berhad, a prominent Malaysian cooperative. Previous research has linked cooperative failures to poor governance, financial mismanagement, and a lack of member involvement. The primary aim of this study is to examine how board governance influences financial outcomes and to provide practical recommendations for improving cooperative performance. Adopting a quantitative design and case study approach, the research analyses Koop Sahabat’s annual reports from 2018 to 2022. Descriptive and Pearson correlation analyses are employed to assess the relationships between board size, gender diversity, meeting frequency, and financial performance indicators. The findings reveal that board size has no significant effect on financial performance, whereas gender diversity and meeting frequency positively influence financial outcomes. These results suggest that incorporating diverse perspectives and conducting frequent board meetings improve decision-making and enhance management effectiveness. Overall, the study underscores the critical role of gender diversity and meeting frequency in driving financial performance, boosting competitiveness, and ensuring the long-term sustainability of Koop Sahabat.