Women on Board and the impact on Financial Firm Performance - A case study in India

This paper studies the e_ect of having a gender diverse corporate board on _nancial _rm performance. Past literature indicates that there is inconclusive evidence whether having gender diverse board increases _nancial _rm performance. This is due to di_erent de_nitions of _nancial _rm performance, gender diversity and the location of _rms studied. India is taken as the country of interest to study the e_ect of having a gender diverse board due to its relatively small female labour participation while simultaneously being one of the few third world countries to have implemented a legislation that requires a minimum number of women present within a corporate board. 4,441 public _rms between 2004 and 2016 are used to study the e_ect of having a gender diverse board on accounting (ROA) and market performance (Tobin's Q) while accounting for institutional intervention, family business, critical mass and independent directors. The results indicates that gender diversity has a positive e_ect on market performance for non-_nancial forms. Gender-balanced boards has a negative e_ect on accounting performance for micro enterprises, while family business that have a higher gender diversity has a positive e_ect on market performance. Finally, the e_ect of Companies Act 2013 indicated a negative e_ect on family businesses with a higher gender diversity in terms of accounting performance. This is consistent across micro enterprises.