Board Gender Diversity, Board Composition, CEO Duality, Firm Size, and Liquidity: Impact on Financial Performance of Non-financial Listed Firms in Pakistan

Abstract

This study aims to investigate whether board structure (i.e. board size, board independence, CEO duality) and board gender diversity affect financial performance of non-financial listed firms in Pakistan. Moreover, this study investigates whether theories related to corporate governance provide any support to understand the impact of board structure and board gender diversity on firm performance. To estimate the results data were taken from annual reports of non-financial firms related to cement, food & personal care products and pharmaceutical sectors over a period of 6 years from 2018 to 2023. Panel data techniques namely pooled OLS, fixed effects and random effects methods used to estimate the results. Results show that board size is positively related to firm performance. The positive relation confirms the predictions of resource-based view. Interestingly, board independence is inversely related to firm value. The negative relation might be due to excessive involvement of independent directors in strategic decisions. Moreover, undue deliberations on strategic issues may lead to delay in decision making which inversely affect the firm performance. CEO duality is positively related to profitability and firm value. Finally, board gender diversity is positively related to firm performance. Findings provide support to researchers, academicians, managers and creditors to understand the difference between theory and practice.