Does the board gender diversity enhance firm performance?

Abstract

Board gender diversity is a keenly debated topic in both management practice and academic discourse. This study examines the influence of board gender diversity on firm financial performance in four ASEAN countries. Adopting agency and resource dependence approaches, board gender diversity’s interactions with three mediating organizational variables are evaluated against four organisational performance measures. Partially supporting agency theory and resource dependence theory, the results suggest that board gender diversity are only positively associated with sales to fixed asset ratio and sales per employee ratio. The BGD’s effects at the organisational level are mediated distinctly by firm size, ownership structure, and industry nature respectively, and by the multivariate interaction among these variables. The results of this paper support the findings of other studies that found a partially significant link between the board gender diversity and the firm’s performance. Decision-makers in society and politics, therefore, need to be aware of the empirical evidence indicating that stimulating organisational environment may need to be configured before the valuable outcomes of gender diversity can be achieved.