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Women directors and corporate performance: firm size and board monitoring as the least focused factors

Women directors and corporate performance: firm size and board monitoring as the least focused... This paper aims to examine the impact of women directors on corporate performance (CP) and the mediating role of board monitoring in their relationship.Design/methodology/approachThe ordinary least squares with panel corrected standard errors are used as a primary estimator along with three other estimators to check the robustness of the estimations and address the potential endogeneity in a stratified random sample of 320 non-financial Malaysian companies listed on Bursa Malaysia (Stock Exchange) between 2010 and 2014.FindingsIt is found that women directors on the board not only improve firms’ return on assets but also reduce the volatility of their stocks. However, these findings are more applicable in small firms as compared to large firms. Besides, it is also noted the board monitoring significantly mediates the relationship between women directors and CP.Practical implicationsAs the monitoring role of women directors improves CP, substantial efforts may be put in to increase their meritorious representation on the boards. The regulators could pay equal attention to the small firms. Additionally, the number of board meetings may also be increased for strengthening the monitoring abilities of the board to improve CP.Originality/valueThe study contributes to the existing literature, as little attention has been paid to the mediation of board monitoring in the nexus of women directors and CP in the past. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Gender in Management: An International Journal Emerald Publishing

Women directors and corporate performance: firm size and board monitoring as the least focused factors

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1754-2413
DOI
10.1108/gm-12-2019-0252
Publisher site
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Abstract

This paper aims to examine the impact of women directors on corporate performance (CP) and the mediating role of board monitoring in their relationship.Design/methodology/approachThe ordinary least squares with panel corrected standard errors are used as a primary estimator along with three other estimators to check the robustness of the estimations and address the potential endogeneity in a stratified random sample of 320 non-financial Malaysian companies listed on Bursa Malaysia (Stock Exchange) between 2010 and 2014.FindingsIt is found that women directors on the board not only improve firms’ return on assets but also reduce the volatility of their stocks. However, these findings are more applicable in small firms as compared to large firms. Besides, it is also noted the board monitoring significantly mediates the relationship between women directors and CP.Practical implicationsAs the monitoring role of women directors improves CP, substantial efforts may be put in to increase their meritorious representation on the boards. The regulators could pay equal attention to the small firms. Additionally, the number of board meetings may also be increased for strengthening the monitoring abilities of the board to improve CP.Originality/valueThe study contributes to the existing literature, as little attention has been paid to the mediation of board monitoring in the nexus of women directors and CP in the past.

Journal

Gender in Management: An International Journal – Emerald Publishing

Published: Jun 21, 2021

Keywords: Gender diversity; Corporate performance; Monitoring; Malaysia

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