Board gender diversity and corporate financial performance in the Vietnamese stock market

Abstract

Enterprises are considered as an important entity in the economies of all countries. The Board of Directors is the heart of the enterprise and plays a decisive role in all activities of the enterprise and also implements policies on investment, capital mobilization and dividend distribution in the enterprise. The choice of board of directors in a joint-stock enterprise significantly affects the business activities of the enterprise and thereby affects the contribution of the enterprise to the economy. In the current development process, in addition to enhancing board independence and expanding the board of directors, the board of directors aims at gender diversity in order to maximize the contribution of all kinds of people to the development of enterprise. Using 98 firms listed on the Hanoi Stock Exchange and Ho Chi Minh City Stock Exchange in the period of 2014 – 2019, and using quantitative analysis on unbalanced panel data, the research results indicate that the participation of women helps the board of directors for gender diversity as well as the independence of the board has not yet had an impact on the financial performance of the business. However, the larger board size is consistent with a greater financial performance, and the smaller board size can lead the lower the financial performance. The research also confirms that choosing the optimal capital structure has the potential to improve corporate profitability and help businesses take advantage of tax shields and business supervision. In this research, we have not found the benefits of large enterprises on the financial performance on the stock exchange. It can confirm that the size of the business has not had an impact on the profit of the business.