Woman On Board And Firm Performance: Evidence From Industrial Companies

Abstract

This study aims to examine the effect of board gender diversity on the firm performance. This study also includes controlling variable effect to examine the relationship between gender diversity and firm performance. The ordinary least squares (OLS) regression analysis is used to investigate the relationship between gender diversity of board of directors and firm performance. This study tests the hypotheses on a sample of listed industrial companies on the Bursa Malaysia for the year 2016. The results indicate that the boards of sample companies in Malaysia are male-dominated. Moreover, this study finds that the board gender diversity did not have significant impacts on firm performance, as measured by return on assets (ROA) and return on equity (ROE). Limited empirical evidences and studies have been conducted on the relationship between board gender diversity and firm performance in emerging countries. In addition, lack of consensus on the relationship between board gender diversity and firm performance and it was based on mixed and contradictory findings in prior research. Therefore, this study extent the current literature in the context of Malaysia indicates that female directors cannot play their roles actively and effectively due to a very limited number of female representatives on the boardroom. This study contributes advanced empirical evidence on board gender diversity and board characteristics on the firm performance relationship in the context of Malaysia.