The Role of Stakeholder Trust in Mediating the Relationship Between Organisational Factors, Transparent Communication, and Perceived Stakeholder Engagement

Wong, Ying Fung (2025) The Role of Stakeholder Trust in Mediating the Relationship Between Organisational Factors, Transparent Communication, and Perceived Stakeholder Engagement. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

This study investigates the influence of internal governance practices on perceived stakeholder engagement within corporate settings, emphasising the mediating role of stakeholder trust. Grounded in Stakeholder Theory, the research develops a conceptual model that positions Organisational Factors (OF) and Transparent Communication (TC) as key antecedents of perceived Stakeholder Engagement (SE), with Stakeholder Trust (ST) serving as the mediating variable. By integrating constructs such as ethical culture, participatory practices, and transparent dialogue, the study offers a behavioural and relational lens on corporate governance effectiveness. A quantitative, cross-sectional approach was adopted, with data collected via structured questionnaires from 205 respondents across various Malaysian corporations. The constructs were measured using a 7-point Likert scale, and the reliability and validity of the scales were assessed through Cronbach’s alpha and factor analysis. The hypotheses were tested using SPSS and Hayes' PROCESS macro for mediation analysis. The findings reveal that both organisational factors and transparent communication significantly influence stakeholder trust, which in turn positively mediates the relationship with perceived stakeholder engagement. However, direct effects between transparent communication and engagement were weaker when trust was accounted for, underscoring the importance of psychological mechanisms in fostering sustainable stakeholder relationships. These results contribute to the literature by highlighting trust as a critical channel through which internal governance practices shape stakeholder perceptions and behaviour. The study provides theoretical contributions by extending Stakeholder Theory with trust-based mediation and offers practical implications for leaders and boards aiming to enhance stakeholder loyalty, advocacy, and collaborative participation. Limitations and directions for future research are also discussed.