Is Gender Diversity Significant in Affecting Financial Performance of A Firm? The Case of Indian Automobile Sector

Abstract

Women can play a key role by mentoring and establishing efficient networking in order to empower them and unlock the doors of success. They constitute a pool of administrative and finance/HR management leadership; but their skills usually go unrecognised despite their experience and qualification. Similar situation can be witnessed in the board room of companies where a smaller number of women directors are employed. As stakeholders have diverse interest, there is need to have diversity in board so that the issues faced by employees, suppliers and customers etc. can be addressed. In this paper an attempt has been made to check the impact of gender diversity on the financial performance of the Indian Automobile companies. In order to check this relationship, the variables taken were profits after tax, return on assets, percentage of women directors in board, Blau Index, Shannon Index, percentage of women directors in the audit committee and total assets. Regression analysis was used to test this association. This study also supports the existing literature that the gender diversity is not having any impact on the financial performance of any company. The gender diversity that is presence of women directors in the board is not affecting the profit after tax and the return on assets of the Indian automobile sector significantly.Classification-JEL: G34, M14, L25