The Effect of Board Gender Diversity on the Company: A Literature Review

  • Kadek Agus Darmawan Master of Accounting Study Program, Faculty of Economics and Business, Airlangga University, Indonesia
Keywords: Gender Diversity, Management, Finance, Business, Board of Directors

Abstract

This study explores the influence of gender diversity in boards of directors on various aspects of corporate performance. Through the literature review method, this research gathers empirical evidence to assess how gender diversity affects risk-taking, social responsibility, and decision-making processes within the firm. The results show that the presence of women on boards can contribute positively to corporate performance, innovation, investment, and ESG issues, while bringing diverse perspectives, experiences, and expertise that support more effective decision-making and risk management. On the other hand, the study also recognizes that underrepresentation of women may reduce the benefits of gender diversity. Furthermore, the presence of women on boards is associated with reduced agency problems, increased dividend payouts and more responsible tax avoidance practices. However, there are mixed views regarding the impact of gender diversity, emphasizing the importance of considering the firm-specific context in evaluating the impact of gender diversity on firm performance. This study contributes to future research by providing a broader and deeper knowledge base on the topic of gender diversity in the context of business and management.

References

Abou-El-Sood, H. (2021). Board gender diversity, power, and bank risk taking. International Review of Financial Analysis, 75(February), 101733. https://doi.org/10.1016/j.irfa.2021.101733

Adusei, M. (2019). Board gender diversity and the technical efficiency of microfinance institutions: Does size matter? International Review of Economics and Finance, 64(August), 393–411. https://doi.org/10.1016/j.iref.2019.07.008

Adusei, M., & Obeng, E. Y. T. (2019). Board gender diversity and the capital structure of microfinance institutions: A global analysis. Quarterly Review of Economics and Finance, 71, 258–269. https://doi.org/10.1016/j.qref.2018.09.006

Aguir, I., Boubakri, N., Marra, M., & Zhu, L. (2023). Gender diversity in leadership: Empirical evidence on firm credit risk. Journal of Financial Stability, 69(August 2022), 101185. https://doi.org/10.1016/j.jfs.2023.101185

Ain, Q. U., Yuan, X., & Javaid, H. M. (2022). The impact of board gender diversity and foreign institutional investors on firm innovation: evidence from China. European Journal of Innovation Management, 25(3), 813–837. https://doi.org/10.1108/EJIM-10-2020-0439

Ain, Q. U., Yuan, X., Javaid, H. M., Usman, M., & Haris, M. (2020). Female directors and agency costs: evidence from Chinese listed firms. International Journal of Emerging Markets, 1604–1633. https://doi.org/10.1108/IJOEM-10-2019-0818

Alkhawaja, A., Hu, F., Johl, S., & Nadarajah, S. (2023). Board gender diversity, quotas, and ESG disclosure: Global evidence. International Review of Financial Analysis, 90(June 2022), 102823. https://doi.org/10.1016/j.irfa.2023.102823

Alkurdi, A., Almarayeh, T., Bataineh, H., Al Amosh, H., & Khatib, S. F. A. (2023). Corporate profitability and effective tax rate: the moderating role of board gender diversity. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-05-2022-0122

Almor, T., Bazel-Shoham, O., & Lee, S. M. (2022). The dual effect of board gender diversity on R&D investments. Long Range Planning, 55(2), 101884. https://doi.org/10.1016/j.lrp.2019.05.004

Arvanitis, S. E., Varouchas, E. G., & Agiomirgianakis, G. M. (2022). Does Board Gender Diversity Really Improve Firm Performance? Evidence from Greek Listed Firms. Journal of Risk and Financial Management, 15(7). https://doi.org/10.3390/jrfm15070306

Ben Slama, R., Ajina, A., & Lakhal, F. (2019). Board gender diversity and firm financial performance in France: Empirical evidence using quantile difference-in-differences and dose-response models. Cogent Economics and Finance, 7(1). https://doi.org/10.1080/23322039.2019.1626526

Boukattaya, S., & Omri, A. (2021). Impact of board gender diversity on corporate social responsibility and irresponsibility: Empirical evidence from france. Sustainability (Switzerland), 13(9). https://doi.org/10.3390/su13094712

Boutchkova, M., Gonzalez, A., Main, B. G. M., & Sila, V. (2021). Gender diversity and the spillover effects of women on boards. Corporate Governance: An International Review, 29(1), 2–21. https://doi.org/10.1111/corg.12339

Buallay, A., & Alhalwachi, L. (2022). Board gender diversity and environmental disclosure: evidence from the banking sector. Journal of Chinese Economic and Foreign Trade Studies, 15(3), 350–371. https://doi.org/10.1108/JCEFTS-08-2021-0046

Chu, S., & Oldford, E. (2023). Female directors, R&D activities and firms’ investment efficiency: evidence from China. Asia-Pacific Journal of Accounting and Economics, 30(4), 890–911. https://doi.org/10.1080/16081625.2021.2023025

Elouaer, N., Waheed, R., Sarwar, S., & Aziz, G. (2022). Does Gender Diversity and Experience Moderate the Impact of Tax Aggressiveness on Corporate Social Responsibility: A Study of UAE Listed Companies. Sustainability (Switzerland), 14(21). https://doi.org/10.3390/su142114348

Fauziah, E. I., Probohudono, A. N., & Setiawan, D. (2022). The Effect of Board Gender Diversity on Dividend Payments: Evidence from Indonesia. Australasian Accounting, Business and Finance Journal, 16(6), 3–22. https://doi.org/10.14453/aabfj.v16i6.02

Galbreath, J. (2018). Is Board Gender Diversity Linked to Financial Performance? The Mediating Mechanism of CSR. Business and Society, 57(5), 863–889. https://doi.org/10.1177/0007650316647967

Ghaleb, B. A. A., Qaderi, S. A., Almashaqbeh, A., & Qasem, A. (2021). Corporate social responsibility, board gender diversity and real earnings management: The case of Jordan. Cogent Business and Management, 8(1). https://doi.org/10.1080/23311975.2021.1883222

Heilman, M. E., Block, C. J., Martell, R. F., & Simon, M. C. (1989). Has Anything Changed? Current Characterizations of Men, Women, and Managers. Journal of Applied Psychology, 74(6), 935–942. https://doi.org/10.1037/0021-9010.74.6.935

Huang, J., & Kisgen, D. J. (2013). Gender and corporate finance: Are male executives overconfident relative to female executives? Journal of Financial Economics, 108(3), 822–839. https://doi.org/10.1016/j.jfineco.2012.12.005

Issa, A., & Fang, H. X. (2019). The impact of board gender diversity on corporate social responsibility in the Arab Gulf states. Gender in Management, 34(7), 577–605. https://doi.org/10.1108/GM-07-2018-0087

Jarboui, A., Kachouri Ben Saad, M., & Riguen, R. (2020). Tax avoidance: do board gender diversity and sustainability performance make a difference? Journal of Financial Crime, 27(4), 1389–1408. https://doi.org/10.1108/JFC-09-2019-0122

Jiang, L., Cherian, J., Sial, M. S., Wan, P., Filipe, J. A., Mata, M. N., & Chen, X. (2021). The moderating role of CSR in board gender diversity and firm financial performance: empirical evidence from an emerging economy. Economic Research-Ekonomska Istrazivanja , 34(1), 2354–2373. https://doi.org/10.1080/1331677X.2020.1863829

Kamran, M., Djajadikerta, H. G., Mat Roni, S., Xiang, E., & Butt, P. (2023). Board gender diversity and corporate social responsibility in an international setting. Journal of Accounting in Emerging Economies, 13(2), 240–275. https://doi.org/10.1108/JAEE-05-2021-0140

Khan, H. ur R., Bin Khidmat, W., Hammouda, A., & Muhammad, T. (2023). Machine learning in the boardroom: Gender diversity prediction using boosting and undersampling methods. Research in International Business and Finance, 66(April 2022), 102053. https://doi.org/10.1016/j.ribaf.2023.102053

Kompa, K., & Witkowska, D. (2018). Gender diversity in the boardrooms of public companies in Poland: Changes and implications. Montenegrin Journal of Economics, 14(1), 79–92. https://doi.org/10.14254/1800-5845/2018.14-1.6

Konadu, R., Ahinful, G. S., Boakye, D. J., & Elbardan, H. (2022). Board gender diversity, environmental innovation and corporate carbon emissions. Technological Forecasting and Social Change, 174(October). https://doi.org/10.1016/j.techfore.2021.121279

Kweh, Q. L., Ahmad, N., Ting, I. W. K., Zhang, C., & Hassan, H. Bin. (2019). Board gender diversity, board independence and firm performance in malaysia. Institutions and Economies, 11(2), 1–20.

Kwon, H. J., Moon, C., & Kim, J. (2023). The impact of female board directors on effective investment management: evidence from Korean firms. Gender in Management, 38(6), 705–729. https://doi.org/10.1108/GM-04-2022-0131

Lee, K. W., & Thong, T. Y. (2023). Board gender diversity, firm performance and corporate financial distress risk: international evidence from tourism industry. Equality, Diversity and Inclusion, 42(4), 530–550. https://doi.org/10.1108/EDI-11-2021-0283

Lewellyn, K. B., & Muller-Kahle, M. I. (2020). The Corporate Board Glass Ceiling: The Role of Empowerment and Culture in Shaping Board Gender Diversity. Journal of Business Ethics, 165(2), 329–346. https://doi.org/10.1007/s10551-019-04116-9

Li, Z., Jia, J., & Chapple, L. (2022). Board gender diversity and firm risk: international evidence. Managerial Auditing Journal, 37(4), 438–463. https://doi.org/10.1108/MAJ-05-2021-3157

Likitapiwat, T., Treepongkaruna, S., Jiraporn, P., & Uyar, A. (2022). Corporate Culture, Innovation, and Female Board Representation: Evidence from Earnings Conference Calls. Quarterly Journal of Finance, 12(4), 1–46. https://doi.org/10.1142/S2010139222500124

Lin, X., Yu, L., Zhang, J., Lin, S., & Zhong, Q. (2022). Board Gender Diversity and Corporate Green Innovation: Evidence from China. Sustainability (Switzerland), 14(22), 1–24. https://doi.org/10.3390/su142215020

Mahsina, & Agustia, D. (2023). Does green innovation play an important role in the effect board gender diversity has on firm performance? Intangible Capital, 19(2), 146–164. https://doi.org/10.3926/IC.2020

Maji, S. G., & Saha, R. (2021). Gender diversity and financial performance in an emerging economy: empirical evidencefrom India. Management Research Review, 44(12), 1660–1683. https://doi.org/10.1108/MRR-08-2020-0525

Marquez-Cardenas, V., Gonzalez-Ruiz, J. D., & Duque-Grisales, E. (2022). Board gender diversity and firm performance: evidence from Latin America. Journal of Sustainable Finance and Investment, 12(3), 785–808. https://doi.org/10.1080/20430795.2021.2017256

Martinez-Jimenez, R., Hernández-Ortiz, M. J., & Cabrera Fernández, A. I. (2020). Gender diversity influence on board effectiveness and business performance. Corporate Governance (Bingley), 20(2), 307–323. https://doi.org/10.1108/CG-07-2019-0206

Mehmood, A., De Luca, F., & Quach, H. (2023). Investigating how board gender diversity affects environmental, social and governance performance: Evidence from the utilities sector. Utilities Policy, 83(May), 101588. https://doi.org/10.1016/j.jup.2023.101588

Muhammad, H., & Migliori, S. (2022). Effects of board gender diversity and sustainability committees on environmental performance: A quantile regression approach. Journal of Management and Organization, March. https://doi.org/10.1017/jmo.2022.8

Nadeem, M. (2020). Does board gender diversity influence voluntary disclosure of intellectual capital in initial public offering prospectuses? Evidence from China. Corporate Governance: An International Review, 28(2), 100–118. https://doi.org/10.1111/corg.12304

Nadeem, M., Bahadar, S., Gull, A. A., & Iqbal, U. (2020). Are women eco-friendly? Board gender diversity and environmental innovation. Business Strategy and the Environment, 29(8), 3146–3161. https://doi.org/10.1002/bse.2563

Naveed, K., Khalid, F., & Voinea, C. L. (2023). Board gender diversity and corporate green innovation: An industry-level institutional perspective. Corporate Social Responsibility and Environmental Management, 30(2), 755–772. https://doi.org/10.1002/csr.2386

Nerantzidis, M., Tzeremes, P., Koutoupis, A., & Pourgias, A. (2022). Exploring the black box: Board gender diversity and corporate social performance. Finance Research Letters, 48(May), 102987. https://doi.org/10.1016/j.frl.2022.102987

Ngo, M. T., Pham, T. H. Van, & Luu, T. T. T. (2019). Effect of board diversity on financial performance of the Vietnamese listed firms. Asian Economic and Financial Review, 9(7), 743–751. https://doi.org/10.18488/journal.aefr.2019.97.743.751

Orazalin, N. (2020). Board gender diversity, corporate governance, and earnings management: Evidence from an emerging market. Gender in Management, 35(1), 37–60. https://doi.org/10.1108/GM-03-2018-0027

Oyotode-Adebile, R. M., & Raja, Z. A. (2019). Board gender diversity and US corporate bonds. International Journal of Managerial Finance, 15(5), 771–791. https://doi.org/10.1108/IJMF-10-2018-0290

Pandey, N., Kumar, S., Post, C., Goodell, J. W., & García-Ramos, R. (2022). Board gender diversity and firm performance: A complexity theory perspective. In Asia Pacific Journal of Management (Vol. 40, Issue 3). Springer US. https://doi.org/10.1007/s10490-022-09817-w

Peng, X., Qi, T., & Wang, G. (2022). Board Gender Diversity, Corporate Social Disclosures, and National Culture. SAGE Open, 12(4), 1–19. https://doi.org/10.1177/21582440221130946

Pidani, R. R., Mahmood, A., & Agbola, F. W. (2020). Does the board gender diversity enhance firm performance? Asian Journal of Business Research, 10(1), 29–46. https://doi.org/10.14707/ajbr.200074

Poletti-Hughes, J., & Briano-Turrent, G. C. (2019). Gender diversity on the board of directors and corporate risk: A behavioural agency theory perspective. International Review of Financial Analysis, 62(January), 80–90. https://doi.org/10.1016/j.irfa.2019.02.004

Pothisarn, T., Chatjuthamard, Jiraporn, & Papangkorn. (2018). Sustainability, asset redeployability, and board gender diversity. Grou, 23529(2), 1–45.

Riguen, R., Salhi, B., & Jarboui, A. (2021). The Impact of Audit Characteristics on Corporate Tax Avoidance: The Moderating Role of Gender Diversity. Scientific Annals of Economics and Business, 68(1), 97–114. https://doi.org/10.47743/saeb-2021-0002

Saeed, A., & Sameer, M. (2017). Impact of board gender diversity on dividend payments: Evidence from some emerging economies. International Business Review, 26(6), 1100–1113. https://doi.org/10.1016/j.ibusrev.2017.04.005

Sattar, M., Biswas, P. K., & Roberts, H. (2022). Board gender diversity and firm risk in UK private firms. Global Finance Journal, 54(July), 100766. https://doi.org/10.1016/j.gfj.2022.100766

Shakil, M. H., Tasnia, M., & Mostafiz, M. I. (2020). Board gender diversity and environmental, social and governance performance of US banks: moderating role of environmental, social and corporate governance controversies. International Journal of Bank Marketing, 39(4), 661–677. https://doi.org/10.1108/IJBM-04-2020-0210

Shoham, A., Lee, S. M., Khan, Z., Tarba, S. Y., & Ahammad, M. F. (2020). The effect of board gender diversity on cross-listing. Journal of Corporate Finance, 65(December 2019), 101767. https://doi.org/10.1016/j.jcorpfin.2020.101767

Sila, V., Gonzalez, A., & Hagendorff, J. (2016). Women on board: Does boardroom gender diversity affect firm risk? Journal of Corporate Finance, 36, 26–53. https://doi.org/10.1016/j.jcorpfin.2015.10.003

Singh, J., Singhania, S., & Aggrawal, D. (2023). Does board gender diversity impact financial performance? Evidence from the Indian IT sector. Society and Business Review, 18(1), 51–70. https://doi.org/10.1108/SBR-09-2021-0164

Strydom, M., Au Yong, H. H., & Rankin, M. (2017). A few good (wo)men? Gender diversity on Australian boards. Australian Journal of Management, 42(3), 404–427. https://doi.org/10.1177/0312896216657579

Tleubayev, A., Bobojonov, I., Gagalyuk, T., & Glauben, T. (2020). Board gender diversity and firm performance: Evidence from the Russian agri-food industry. International Food and Agribusiness Management Review, 23(1), 35–53. https://doi.org/10.22434/IFAMR2019.0011

Trinh, V. Q., Trinh, H. H., Nguyen, T. H. H., & Vo, X. V. (2023). Board gender diversity and firm-level climate change exposure: A global perspective. Finance Research Letters, 55(PB), 103995. https://doi.org/10.1016/j.frl.2023.103995

Wasiu Abiodun, S., Micheal Rotimi, S., Menslu, S., Zhaxat, K., Tursynzada, K., & Biola Hammed, A. (2023). Board gender diversity and corporate social responsbility. Cogent Business and Management, 10(3). https://doi.org/10.1080/23311975.2023.2257834

Yahya, F., Manan, A., Jan Khan, M. W., & Hashmi, M. S. (2021). The moderating role of board gender diversity between power-based corporate governance and tax aggressiveness. Economics and Business Letters, 10(2), 104–147. https://doi.org/10.17811/ebl.10.2.2021.104-147

Yasser, Q. R., Al Mamun, A., & Ahmed, I. (2017). Corporate Social Responsibility and Gender Diversity: Insights from Asia Pacific. Corporate Social Responsibility and Environmental Management, 24(3), 210–221. https://doi.org/10.1002/csr.1400

Ye, D., Deng, J., Liu, Y., Szewczyk, S. H., & Chen, X. (2019). Does board gender diversity increase dividend payouts? Analysis of global evidence. Journal of Corporate Finance, 58(January 2018), 1–26. https://doi.org/10.1016/j.jcorpfin.2019.04.002

Yu, C. (2023). Board gender diversity and investment inefficiency. Journal of Economics and Business, 124(December 2022), 106107. https://doi.org/10.1016/j.jeconbus.2022.106107

Zampone, G., Nicolò, G., Sannino, G., & De Iorio, S. (2022). Gender diversity and SDG disclosure: the mediating role of the sustainability committee. Journal of Applied Accounting Research.

Published
2024-03-21
How to Cite
Darmawan, K. A. (2024). The Effect of Board Gender Diversity on the Company: A Literature Review. Journal La Sociale, 5(2), 437-449. https://doi.org/10.37899/journal-la-sociale.v5i2.1122