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ABSTRACT

Purpose
This study aims to explore the relationship between audit committee effectiveness and Environmental, Social, and Governance (ESG) ratings with the moderating effect of board gender diversity.

Design/Methodology/Approach
The research will employ a quantitative approach, utilizing archival data from Malaysian publicly listed companies in the period of 2024 only.  Non-financial companies are excluded due to being heavily regulated, and financial institutions have less impact on environmental footprints.  Regression analysis will be conducted to examine the extent to which audit committee effectiveness impacts ESG ratings and whether the moderating effect of board gender diversity on this relationship. The study will control for firm-specific factors such as size, leverage, growth, and governance structure.

Expected Contribution

This study contributes to the growing intersection of corporate governance and sustainability by empirically demonstrating that audit committee effectiveness significantly enhances ESG ratings, and that this relationship is further strengthened by gender-diverse boards. It provides a deeper understanding of how governance mechanisms shape sustainable corporate behavior, offering actionable insights for researchers, regulators, investors, and corporate leaders

Originality/Value
Despite the growing emphasis on ESG performance, studies on the association of audit committee effectiveness towards ESG ratings by the moderating effect of board gender diversity is inconclusive. This study offers a novel perspective by analyzing how governance mechanisms interact with ESG assessments, thereby enriching both ESG and sustainability literature.

Keywords: Audit committee effectiveness, ESG ratings, Agency theory, Stakeholer theory