Abstract
This study examines the relationship between female board representation and performance of Saudi nonfinancial listed firms. Using a sample of 350 firms over the period 2016 to 2019, the study finds that neither female board representation nor the attributes of the women in the sample (qualification, experience, and independence) are significantly related to firm performance. The current study also finds that the diligence of female directors does not modify the relationship between their board representation and the performance of Saudi nonfinancial listed firms. Considering the fact that no Saudi nonfinancial listed firm has more than two female members on its board, the result of this study suggests the importance of having a critical mass of female board directors in order to make a greater contribution to firm performance. Furthermore, current female board representation supports the notion of tokenism in Saudi businesses. Keywords : female board representation, performance, Saudi nonfinancial listed firms. DOI: 10.7176/RJFA/11-24-04 Publication date: December 31 st 2020
Highlights
The effect of women in company boardrooms has received significant attention from both academics and policy makers in recent years
The average value of Return on asset (ROA) indicates that Saudi nonfinancial listed firms reported a low performance over the period 2016-2019, with a trimmed mean value of
This study has examined the relationship between female board representation and the performance of Saudi nonfinancial listed firms
Summary
The effect of women in company boardrooms has received significant attention from both academics and policy makers in recent years. It has been found that female directors can provide fruitful debate on the boards through sharing new ideas, adding different perspectives on the issues being debated, and finding solutions to the problems in a creative manner (Bennouri, Chitoui, Nagati, and Nekhili, 2018; Milliken and Martins, 1996; Post and Byron, 2015). Female board directors tend to provide assurance of their ability to succeed in boardrooms through attending more board meetings than their male counterparts, participating in key board committees, and carrying out the responsibilities they are assigned. They enhance the effectiveness of the board and help firms achieve better performance (Rose, 2007)
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