Corporate governance on tax aggressiveness: the moderating role of foreign ownership and financial expertise in cross-country study of Indonesia and Malaysia

Purpose This study investigates how corporate governance mechanisms, specifically executive character, independent commissioners, and gender diversity, affect tax aggressiveness, and examines the moderating roles of foreign ownership and board financial expertise. The study also makes a comparison between Indonesia and Malaysia. Design/methodology/approach A quantitative approach was employed using purposive sampling of 218 manufacturing firms listed on the Indonesia Stock Exchange and 193 firms from Bursa Malaysia during 2020–2022. Panel data regression was conducted using EViews 9, with moderated regression analysis and cross-country comparison to test the proposed hypotheses. Findings Executive character significantly increases tax aggressiveness, and this effect is amplified by board financial expertise. Gender diversity reduces tax aggressiveness, and this effect is further strengthened when female commissioners possess financial expertise. However, independent commissioners showed no significant effect. Foreign ownership moderates the relationship between gender diversity and tax aggressiveness but does not influence the effects of executive character or independence. Cross-country results reveal that executive risk-taking and gender diversity have a stronger impact on tax aggressiveness in Indonesia compared to Malaysia. Practical implications Policymakers and regulators should enhance the effectiveness of board financial oversight and promote genuine independence in board composition. Encouraging gender diversity—particularly with financial expertise—may improve tax compliance. Governments must also strengthen institutional enforcement to deter aggressive tax practices. Originality/value This study contributes to the literature by integrating board financial expertise and cross-country institutional differences into the governance–tax aggressiveness framework. It highlights how the interplay between board characteristics and institutional context shapes corporate tax behavior in Southeast Asia.