Corporate Financial Distress in the Context of Sustainability Performance and Managerial Ownership: Does Gender Diversity Matter?

Abstract

This research aims to explore the role of board gender diversity to enhancing the relationship between sustainability performance and managerial ownership on financial distress. The sample includes all manufacturing companies listed on the Indonesia Stock Exchange, with a total of 298 firm-year observations from 2021 to 2022. The study employs Moderated Regression Analysis (MRA) to test the hypotheses. The findings reveal that both sustainability performance and managerial ownership significantly and positively influence financial distress, while gender diversity significantly enhances this relationship. These results suggest that companies should improve their corporate governance by disclosing sustainability performance and managerial ownership, while also considering the importance of the proportion of women on the board of directors, which can strengthen sustainability performance and enhance corporate management in mitigating financial distress.