The Impact of Corporate Governance on Organisational Agility With the Moderating Factor of Dynamic Capabilities

Abstract

This research examines the relationship between Corporate Governance (independent variable) and Organisational Agility (dependent variable), with Dynamic Capabilities as a moderating factor. The research focuses on the board of directors' perspective on Corporate Governance, specifically Transparency, Compliance, and Board Composition (Diversity). The research also studies the moderating effect of Dynamic Capabilities on the relation. The research context is publicly listed companies (whether government or private) listed on the Dubai Financial Market, Nasdaq Dubai, and Abu Dhabi Stock Exchange. The study's targeted population is the board of directors and C-suite executives of those corporations. A quantitative research methodology was employed, utilising a structured survey instrument distributed to a sample of 328 respondents representing various organisational sectors. The collected data were analysed using statistical techniques, primarily Structural Equation Modelling (SEM), to test the hypothesised relationships and determine the extent to which dynamic capabilities moderate the link between corporate governance and organisational agility. The findings indicate a significant relationship between corporate governance and organisational agility. Boards that demonstrate high levels of transparency, maintain strong compliance mechanisms, and ensure balanced composition tend to enhance their organisations' agility. However, no significant moderating effect was identified for dynamic capabilities. This research contributes to the literature by providing empirical evidence that board-level governance best practices positively impact organisational agility. The study underscores the importance of integrating governance quality with strategic capability development to sustain competitiveness in rapidly changing business contexts. Keywords: corporate governance, organisational agility, dynamic capabilities, transparency, compliance, board diversity, quantitative research