Corporate governance and shareholders’ confidence in cooperatives: a systematic literature review

Background The confidence of Bottom 40 (B40) shareholders is crucial for cooperative’s sustenance within wider corporate governance. An in-depth study on cooperatives is needed, as they play a crucial role in the Malaysian economic system and contribute greatly to the country’s social development. However, in the current landscape, confidence among shareholders is at stake. This study aims to identify the research gap into corporate governance for cooperativess in relation to B40 shareholder confidence, as well as identify current study challenges and develop a conceptual framework for future research. Methods We conducted a systematic literature review, with the use of agency theory to assess shareholders’ confidence. Emerald, ProQuest, InderScience, Scopus and Science Direct were the online databases used in this study to search five keyword phrases: corporate governance, confidence, cooperative, agency theory and Bottom 40% (B40) household. Tranfield’s five stages were used to conduct the systematic review. Results Only 5 of the 324 studies assess shareholders’ confidence in cooperatives, as well as one paper on B40 and two papers on agency theory. Our review presents three major findings. First, research in the context of B40 shareholder’s confidence in cooperatives is scarce. Second, the challenges related to shareholders’ confidence in B40 are major issues in the context. Third, research on agency theory in the context of shareholders’ confidence within cooperatives and corporate governance is still scant. Conclusions This review urges the research community to conduct more studies based on the highlighted research gaps.


Introduction
Malaysia's cooperative movement began in the early twentieth century.Cooperatives are organisations whose purpose is to enhance its members' economic value in line with cooperative goals.Cooperatives is defined as "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise" (International Cooperative Alliance).Consumer cooperatives, labour cooperatives, finance or banking cooperatives, and community cooperatives are only a few examples of cooperatives from various industries.Cooperatives play a crucial part in the Malaysian economic system and contribute greatly to the country's social development.Their contributions are valued at the same level as those made by other businesses, in terms of the value-added to the national economy. 1 This study considers the corporate governance of cooperatives and its relation to shareholders' confidence.Corporate governance is a system of internal rules, procedures and employees that meets shareholders and other stakeholders' requirements via the management and control of management operations with strong business skills, objectivity, responsibility and integrity.
A lack of confidence in the ability of the cooperative management, can in turn, could trigger a financial crisis within the cooperatives.Thus, the failure of a cooperative could become inevitable, which may eventually damage shareholders willingness to provide future investment. 2 The effect of shareholders' views is even more critical in the case of cooperatives, because these companies often have political influence.Politically linked companies can possess bad corporate governance practices and higher-level corporate issues because they depend heavily on the federal government. 3Thus, studying corporate governance's impact on the confidence levels of shareholders in cooperatives is essential.Serious consequences may arise if it affects the confidence of Bottom 40 (B40) household shareholders.B40 refers to the bottom 40% in Malaysian household income; categorized as low-income householders earning below 4850 Malaysian Ringgit (RM) per month (approximately USD$1158).Various cooperatives offered a share to the B40 employees or B40 members as one of the cooperatives benefits.Such cooperatives in Malaysia include the Armed Forces Cooperative, National Land Finance Co-operative Society (NLFCs), Koperasi Permodalan Felda Berhad and many more.Factors such as transparency, trustworthiness, integrity and good governance, are the key factors in creating shareholder confidence, and ensuring cooperative organisations remain competitive.

Corporate governance
Malaysia's awareness of the importance of corporate governance began after the 1997 financial crisis, which hit many Southeast Asian countries, resulting in a tremendous decline in share prices and currency value. 4][7] One of the country's oldest cooperatives, Malay Officers Cooperative Credit and Investment Society (MOCCIS), was declared bankrupt in 2008.The government also seized the accounts of three cooperatives in December 2008, after it was discovered that they had misled over 5,000 members into investing RM80 million in unlawful get-rich-quick schemes.Koperasi Taqwa Malaysia Berhad (Kotaqwa), Koperasi Ushahawan Malaysia Berhad (KUMB), and Koperasi Birr Berhad (Birr) were the three cooperatives (Consumers'Association of Penang).6][7] Corporate governance framework is a framework of rules and procedures by which the decisions in cooperatives are made, and how the controllers are held accountable for them.

Problems with cooperatives' shareholders
For most scholars, researching the confidence of shareholders in a cooperative organisation is a challenge because of limited literature linking confidence to cooperatives.Therefore, in this study, we seek to describe the notion of shareholders' confidence, in order to understand how it related to the cooperatives' effectiveness.Agency theory may help to shed some light on the existing body of knowledge, to address the problems within this context.REVISED Amendments from Version 2

Agency theory and cooperatives
According to agency theory, businesses operate as agents for their shareholders.That is, shareholders engage in corporate ownership and pledge their assets to the management of the cooperatives' directors and officers.The relationship between cooperative governance and shareholder confidence is examined using the agency theory. 8Agency theory is a relevant theory in this context that influences Malaysia's corporate governance structures.This study's analysis provides valuable information on how business management and shareholder confidence.
The research questions for this study are as follows: 1. Is there a research gap in B40 shareholders' confidence in the cooperatives sector?
2. What are the challenges related to shareholders' confidence in B40?
3. What will be the conceptual framework for B40 shareholders' confidence in the cooperatives sector?
The objectives of this proposal are as follows: 1. To identify if there is a research gap in B40 shareholders' confidence in the cooperatives sector.
2. To understand the challenges related to shareholders' confidence in B40.
3. To propose a conceptual framework for B40 shareholders' confidence in cooperatives sector.Two primary reasons for conducting a systematic literature review are as follows; firstly it enables researchers to locate and systematise existing literature on a specific research topic and determine the level of interest that scholars have shown in investigating a particular topic.Secondly, it adds to our understanding of the types of relationships studied in the context.This study aims to understand and evaluate the B40 shareholders' confidence in cooperatives, concerning risk, expected return and confidence in future investment possibilities.This study is an initiative to identify the major challenges involved in corporate governance practices in cooperative firms.

Ethics
This study was approved by the Research Ethical Committee of Multimedia University, Malaysia (EA2712021).
This study is designed to present a literature review, research gap analysis, conceptual framework and insights gained on cooperatives and their relation to B40 shareholder's confidence.The literature review is based on the five stages of systemic review proposed by Tranfield et al. 9

Identifying and evaluating studies
Articles investigating the confidence components in corporate governance within the context of cooperatives, do not specifically discuss the confidence of shareholders particularly in cooperatives.This study found that the Malaysian Code on Corporate Governance (MCCG) did not apply to cooperatives investors, in terms of there being no explicit regulations for how and when their practices may be improved.Effective corporate governance structure improves B40 shareholders confidence in terms of transparency, trustworthiness, integrity and good governance.As a result, we opted to check the number of publications for the specified keywords as the first step.The keywords range from broad themes (corporate governance) to more targeted terms (corporate governance/confidence/cooperative/B40).

Criteria of inclusion and exclusion
In order to conduct the search for this study, the following exclusion and inclusion criteria was used, detailed in Figure 2 also.Papers were selected if they were published between year 2000 and 2021, had been peer-reviewed, written in English, and if they addressed cooperatives and corporate governance.Journals, conference proceedings, dissertations and special issues were included in the inclusion criteria.Five major databases that were used to conduct the searches; Emerald, Scopus, Science direct, Inderscience and ProQuest.

Keywords
In order to review the literature comprehensively, we followed Tranfield et al.,'s systematic literature review methods, and used Emerald, ProQuest, InderScience, Scopus and Science Direct to search the following keywords: (1) corporate governance, (2) confidence, (3) cooperative, (4) agency theory and (5) B40. 9 The phrases searched included: 'corporate governance', 'corporate governance and investors/shareholders confidence', 'corporate governance and investors/ shareholders confidence and cooperative', 'corporate governance and investors/shareholders confidence and B40' and 'corporate governance and investors/shareholders confidence and cooperative and B40'.The search began with more general searches using the terms 'corporate governance' and/or 'confidence.'The searches were conducted between 1st June 2021 and 15th June 2021.

Search strategy
The search strategy was based on the keyword search, in order to investigate papers in the five major online databases, including Emerald, ProQuest, InderScience, Scopus and Science Direct.This selection was based on these databases' widespread use and high level of academic merit. 10Furthermore, these databases include a large number of periodicals devoted to business and cooperatives.The keywords selected were combined into five possible combinations, as shown in Table 1.The search on 'corporate governance' alone initially produced 77,864 publications.When searched with 'corporate governance and investors/shareholders confidence', the number dropped to 2,304.When we used the keyword combinations of 'corporate governance and investors/shareholders confidence and cooperative,' the number was 324.Subsequently, we found only one publication when we searched for 'corporate governance and investors/shareholders confidence and B40'.The same was also true when we searched for 'corporate governance and investors/shareholders confidence and cooperative and B40'; only one publication was found.
We used the following technique to extract papers from the major web databases mentioned above, summarised in Figure 3.Only confidence in cooperatives papers linked to the B40 group, were selected for further evaluation.

Results
From the 324 papers found through searching for 'corporate governance and investors/shareholders confidence and cooperative, we found five papers relevant to our investigation.Only 5 of the 324 studies assess shareholders' confidence in cooperatives, as well as one paper on B40 and two papers on agency theory.The findings are summarised in Table 2.
Although most of these studies have focused on the direct impact of confidence in cooperatives, some authors are interested in investigating the confidence effect that significant shareholders can exert.Only 5 of the 324 studies, displayed in Table 2, discuss shareholders' confidence in cooperatives, including one paper on B40, and two papers on agency theory.The results of the analysis are presented in Table 3.

Discussion
There are several gaps identified in this study.This paper emphasizes the scarcity of studies on corporate governance related to B40 shareholders confidence in the context of cooperatives.More research and case studies are crucial for cooperatives to understand and adopt any possible recommendations; the implication of which would be to encourage B40 shareholders to invest in such cooperatives.
A limitation of our study is the number of keywords selected; it would have been possible to obtain more papers in our search if the keywords were expanded to broader fields of study, not so specific in nature, such as B40.This could possibly lead to publication biases.

Research gap in B40 shareholders' confidence in the cooperatives sector
Only one paper discussed the importance of the B40 shareholders confidence in the form of trust in cooperatives However, the shareholders' confidence was not sufficiently discussed in order to provide research depth and direction.
Filling the research gap is vital to building more knowledge of B40 shareholders' confidence in investment portfolios; which will help cooperatives build confidence in shareholders as a critical feature.The data are shown in Tables 4 and 5.

Challenges related to shareholders' confidence in B40
The main challenges with shareholders confidence in cooperatives is that it does not stand alone.The challenges related to shareholders' confidence, in general, can be grouped into four categories, including external, internal, government related and population size.The external challenges include corporate tax and social behaviour of shareholders.Restrictive government policies and the high populations in B40 groups are another challenge related to shareholders confidence in B40s.However, these challenges do not sufficiently address the issues faced by B40 shareholders, which is one of the research gaps this study has identified.Furthermore, B40 shareholders are generally illiterate and need more knowledge about investment portfolio.Conceptual framework for B40 shareholders' confidence in the cooperatives sector Agency theory has not been tested for B40 shareholders, particularly to address shareholders' confidence in cooperatives.Shareholder's confidence is a missing piece within the agency theory; especially in cooperatives.Protecting the interests of B40 shareholders who invest in the company and have expectations about the business and their investments, are critical. 11Thus, we propose the following conceptual framework for further studies.
The rationale behind the scarcity of such low research on B40 shareholders is due to a general perception that they are not major contributor to national income and B40 population are not seen as investors in cooperatives context (Share Prosperity Vision 2030).This can be addressed in future by creating more awareness and investment programmes to B40.These activities will help B40 to involve more in buying shares, understand investment and transit to M40 group.

Future recommendations
Researchers looking into the association between B40 shareholder confidence, corporate governance and cooperatives could use the primary findings of this publication, to generate ideas for future research.Two primary research themes could be considered in the future and we hope the academic community conduct more research on the following:

Focus on comparative and longitudinal studies for B40
Future research should focus on comparative and longitudinal studies to understand the dynamics of B40 shareholders' confidence, and explore the impact of digital technology, behavioural finance, policy changes, and sustainability practices on their engagement with cooperatives.
Table 5. Summary of papers on shareholder confidence in cooperatives, B40, and agency theory.

Corporate governance in cooperatives for M40 shareholders
Future studies also should focus more on the Middle 40 (M40) shareholders, because they are the main contributors to the national GDP.M40 households make up 40% of Malaysia's population, includes mostly wage earners, in public and private sectors, earning between RM4850-10959 per month.

Conclusion
The purpose of this study is to update corporate governance and cooperatives research communities about research gaps, namely in the areas of shareholder confidence, particularly among B40 shareholders.No unique confidence metric exists today, nor a case study explicitly dedicated to confidence.In this study, we used a five-stage technique to review papers based on a thorough examination of the literature in a particular field.According to our in-depth analysis of these papers, there are three primary areas which have room for research.Firstly, there is a pressing need for researchers to standardise the terminologies used the discuss corporate governance, cooperatives and shareholder confidence.Secondly, more research is needed to determine whether corporate governance, cooperatives, shareholder's confidence and the B40 group to form the basis for more effective policy formulation and the basis for guiding the next generation of effective investment.Thirdly, investing in education, vocational training, and digital access for the B40 group enhances their skill set and opens avenues in entrepreneurship, e-commerce, and remote work, crucial for boosting Malaysia's productivity, innovation, and economic growth.In this context, the extent of the commonalities between shareholder confidence and B40 could be investigated further due to its scarcity in research.Finally, further empirical research is needed to understand the elements that influence B40 shareholders' confidence in the context of corporate governance and cooperatives.

Version 1
Reviewer Report 07 February 2024 https://doi.org/10.5256/f1000research.76961.r122503© 2024 R R. This is an open access peer review report distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Rajeswari R Jai Bharath Arts and Science College, Perumbavoor, India
The paper has been well drafted with a precise introduction, research strategy, results drawn, and the conclusion derived.The research questions and objectives set for the study clearly suit the purpose of the study.However, the study can be improved to make it error free.

Main issues:
Since the word "Cooperative Cooperation" may be new to many readers, it would be appropriate to clarify if the term "Cooperations" and "Cooperative Cooperative" have different meanings. 1.
Can mention more about the bottom 40 shareholders and the ways in which it can change the economic development of Malaysia.

2.
Even though, the authors have stated about the scarcity of resources for collection of data on such a topic, authors should emphasise more on this matter, collect the data, analyse it and take the required information for the study.
It will be better if the authors have more suggestions on the future of such a topic and to influence more people to conduct study in this subject.

Are the conclusions drawn adequately supported by the results presented in the review? Yes
If this is a Living Systematic Review, is the 'living' method appropriate and is the search schedule clearly defined and justified?('Living Systematic Review' or a variation of this term should be included in the title.)Yes Competing Interests: No competing interests were disclosed.
Reviewer Expertise: Marketing, International Business, and Logistics and Supply Chain Management.
I confirm that I have read this submission and believe that I have an appropriate level of expertise to confirm that it is of an acceptable scientific standard.

Ravichandran K. Subramaniam
School of Business, Monash University Malaysia, Subang Jaya, Malaysia This paper has been well written with a clear introduction, comprehensive literature, search strategy, and overall results.The theory is sound and backed up with research questions and objectives.However, here are my pointers for the authors to improve the article in order for it to be of indexable quality:

Main Issues:
As there were no info/data available on 'Non-profit Cooperatives', then it is better to just stick to a study on 'Cooperatives' as otherwise, we will be misrepresenting the research. 1.
Based on the overall literature sourced, there has only been one study on B40 out of 77,864.So the authors need to emphasize the scarcity of this study instead of downplaying it by saying it is merely limited.This is a significant finding.

2.
With regards to contribution the authors could mention the rationale for such low research and how this could be addressed in the future.

3.
Using the words 'Cooperative corporations', is rather confusing.Suggest simplifying it to the word 'Cooperatives'.

Other Issues:
Need to have a clear definition of 'Cooperatives' to avoid ambiguity.1.
Suggest elaborating on the term 'corporate governance framework'.

2.
Under the research questions and objectives portion, instead of 'Cooperatives', the authors 3. misspelled it as 'cooperation' and this has been repetitive.
In Figure 2, indicated as 'remove non-profit Cooperatives' and exclude 'profit Cooperatives' to rectify appropriately.

4.
Very few papers discuss the importance of the B40 shareholders' mentioned under the heading "Research gap in B40 shareholders' confidence in the cooperative corporation sector" is not correct as there were only one (as per table 1).

5.
Table 4 & 5 on the non-profit corporations, can be removed to maintain clarity and consistency.
Are the rationale for, and objectives of, the Systematic Review clearly stated?Yes Are sufficient details of the methods and analysis provided to allow replication by others?Yes

Are the conclusions drawn adequately supported by the results presented in the review? Partly
If this is a Living Systematic Review, is the 'living' method appropriate and is the search schedule clearly defined and justified?('Living Systematic Review' or a variation of this term should be included in the title.)Partly Competing Interests: No competing interests were disclosed.
Reviewer Expertise: I have done Corporate governance-related papers and as such I am fine to review this paper I confirm that I have read this submission and believe that I have an appropriate level of expertise to confirm that it is of an acceptable scientific standard, however I have significant reservations, as outlined above.
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Figure 1
Figure 1 below depicts the systematic flowchart of the review methodology.

Figure 1 .
Figure 1.Five stages of systematic review.
& Panterov (2016) The articles did not discuss briefly on B40 investors.Key consideration in adopting B40 investors into the study.

Reviewer Report 21
February 2022 https://doi.org/10.5256/f1000research.76961.r122501© 2022 Subramaniam R.This is an open access peer review report distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

1 .
Cooperatives and corporations are separately defined to avoid confusion.Corporations is organizational entities that have unique structures, objectives, and styles of governance.A cooperative is an officially recognized legal body.2. The bottom 40 shareholders are given more description.3. Corrected misspelled "cooperations" as "cooperatives".4.More suggestions on the future research is added.

Table 3
lists two papers with agency theory and six other theories, which were used in the studies based on different context.

Table 1 .
Summary of keyword results.

Table 2 .
Summary of core papers.

Table 3 .
Summary of theories focused.

Table 4 .
Plotting of papers on shareholder confidence in cooperatives, B40, and agency theory.