The Effect of Board Diversity and Financial Stability on Financial Performance of Banking Sector in Indonesian Stock Exchange

Abstract

The purpose of this research is to identify the relationship between financial stability, diversity on corporate boards, and financial performance for firms listed on the Indonesia Stock Exchange that are involved in the banking industry. Associative explanatory research is what this study is based on. For studies that rely on secondary sources, researchers often peruse audited financial records made available on the Indonesia Stock Exchange's website. In this study, 190 research samples were collected using a purposive sampling strategy. The research criteria were banking firms that had an initial public offering (IPO) before 2016. The observation period fell between 2018 and 2022. The EViews version 12 application was utilized for the quantitative data analysis. According to the study's findings, financial stability positively affects a company's financial performance, but board diversity—as defined by the percentage of women on the board—has no impact on the same.