Women on Board and its Impact on Performance of NIFTY50 Firms
DOI:
https://doi.org/10.18311/sdmimd/2022/30512Keywords:
Board Characteristics, Board of Directors, Financial Performance, India, NIFTY50, Women DirectorsAbstract
This research paper examines the relationship between women representation on Board of Directors and the financial performance of the NSE-NIFTY50 listed firms. The return on assets and assets turnover ratio is used as measure of firm’s performance; using panel regression for a period of 2014-15 to 2018-19, the impact of specific board characteristics including diversity index is assessed. It is observed that the productivity of these firms is clearly affected by the gender diversity. The profitability ratio is not seeing any significant impact. Though there is an overall increasing trend in the representation of women on board in sample firms, just a small proportion of women may not serve the true purpose in affecting the strategic decision making. Therefore, it is suggested that the representation should be more than the mandated number, to see its true impact on firm performance in the long run.
Downloads
Metrics
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 G. Bharathi Kamath
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
References
Carter, D. A., D’Souza, F., Simkins, B. J. and Simpson, W. G. (2008). The diversity of corporate board committees and financial performance. http://papers.ssrn.com/ sol3/papers.cfm?abstract_id_1106698 https://doi.org/10.2139/ssrn.1106698
Christiansen, L., Lin, H., Pereira, J., Topalova, P., and Turk R. (2016). Gender diversity in senior positions and firm performance: Evidence from Europe. IMF Working Paper. 50. https://doi.org/10.2139/ssrn.2759759
Ciavarella, A. (2017). Board diversity and firm performance across Europe. CONSOB Working Papers No. 85. https://doi.org/10.2139/ssrn.3084114
Dalci I. (2018). Impact of financial leverage on profitability of listed manufacturing firms in China. Pacific Accounting Review. 30(4):410–32. https://doi.org/10.1108/PAR01-2018-0008
Darmadi, S. (2013). Do women in top management affect firm performance? Evidence from Indonesia. Corporate Governance: The International Journal of Business in Society. 13(3):288–304. https://doi.org/10.1108/CG-12-2010-0096
Deloitte Global Report. Women in Board room: A global Perspective. 6th edition, October, 2019 Deloitte Global, accessed at www.deloitte.com Ekadah, J. W. and Kiweu, J. M. (2012). Effect of board gender diversity on the performance of commercial banks in Kenya. European Scientific Journal, April edition. 8(7):128–48.
Erhardt, N. L., Werbel, J. D. and Shrader, C. B. (2003). Board of director diversity and firm financial performance. Corporate Governance: An international review. 11(2):102–11. https://doi.org/10.1111/1467-8683.00011
Gallego-Alvarez, I., García-Sánchez, I. M. and RodríguezDominguez, L. (2010). The influence of gender diversity on corporate performance: La influencia de la diversidad de género en el rendimiento empresarial. Revista de Contabilidad-Spanish Accounting Review. 13(1):53– 88. https://doi.org/10.1016/S1138-4891(10)70012-1
Gómez, J. I. M., Cortés, D. L. and Betancourt, G. G. (2017). Effect of the board of directors on firm performance. International Journal of Economic Research. 4.
Gordini, N. and Rancati, E. (2017). Gender diversity in the Italian boardroom and firm financial performance. Management Research Review. 40(1):75–94. https:// doi.org/10.1108/MRR-02-2016-0039
Kamath, B. (2019). Impact of corporate governance characteristics on intellectual capital performance of firms in India. International Journal of Disclosure and Governance. 16(1):20–36. https://doi.org/10.1057/ s41310-019-00054-0
Kilic, M. and Kuzey, C. (2016). The effect of board gender diversity on firm performance: evidence from Turkey. Gender in Management: An International Journal. 31(7):434–55. https://doi.org/10.1108/GM-10-20150088
Low, D. C., Roberts, H. and Whiting, R. H. (2015). Board gender diversity and firm performance: Empirical evidence from Hong Kong, South Korea, Malaysia and Singapore. Pacific-Basin Finance Journal. 35:381–401. https://doi.org/10.1016/j.pacfin.2015.02.008
Marinova, J., Plantenga, J. and Remery, C. (2016). Gender diversity and firm performance: Evidence from Dutch and Danish boardrooms. The International Journal of Human Resource Management. 27(15):1777–90. https://doi.org/10.1080/09585192.2015.1079229
Mehmet Nihat Solakoglu, Nazmi Demir. (2016). The role of firm characteristics on the relationship between gender diversity and firm performance. Management Decision, 54(6):1407-1419.
Mirza, H. H., Andleeb, S. and Ramzan, F. (2012). Gender diversity and firm performance: Evidence from Pakistan. Journal of Social and Development Sciences. 3(5):161–6. https://doi.org/10.22610/jsds.v3i5.698
Murthy, A. (2014). A critical analysis of the need for women directors in Indian Companies. In May 2019. http://www.legalservicesindia.com/article/1774/The-needforwomen-directors-in-Indian-companies.html.
NSE official Website: www.nseindia.com, https://www1.nseindia.com/products/content/equities/indices/ nifty_50.htm
Prasad, R. (2019). Not enough women on board for a success story. in January 2020. https://economictimes.indiatimes.com/news/company/corporate-trends/not-enough-women-on-board-fora-success-story/articleshow/69604330.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Prime Database. (2017). Corporate India: Women on Boards. PRIME Database Group.
Rao, D. S. (2020). Women on boards: India Inc lags in gender parity. January 2021. https://www.thefinapolis. com/exclusive-news/women-on-boards-india-inclags-in-real-genderparity/artmid/1134/articleid/5462/categoryid/83#:~:text=Overall%2C%20the%20number%20of%20women,women%20on%20boards%20is%201.03.
Rashid, A. (2010). CEO duality and firm performance: Evidence from a developing country. Corporate Ownership and Control. 8(1):163–75. https://doi.org/10.22495/cocv8i1c1p1
Reguera-Alvarado, N., De Fuentes, P. and Laffarga, J. (2017). Does board gender diversity influence financial performance? Evidence from Spain. Journal of Business Ethics. 141(2):337–50. https://doi.org/10.1007/s10551015-2735-9
Reddy, S., and Jadhav, A. M. (2019). Gender diversity in boardrooms - A literature review. Cogent Economics and Finance. 7(1):1644703. https://doi.org/10.1080/23 322039.2019.1644703
Sahu, P. (2021). Independent Directors: Three-fourths central public sector undertakings flout norm. April 2021. https://www.financialexpress.com/economy/three-fourths-central-public-sector-undertakings-floutnorm/ 2203733/
Tukur, G. and Balkisu, A. A. (2014). Corporate board diversity and financial performance of insurance companies in Nigeria: An application of panel data approach. Asian Economic and Financial Review. 4(2):257–77.