Why Is Gender Diversity Important for Corporate Boards?

Abstract

The diversity of backgrounds, perspectives, abilities, and resources on boards improves a company’s performance. In recent times, board gender diversity has attracted the attention of policymakers, regulators, and academics. This study explored the influence of board gender diversity on corporate performance. The sample of the study consists of 15 consumer goods companies on the Nigerian Exchange Group from 2012 to 2021. The study uses fixed effects regression to estimate the model. The evidence indicates that gender diversity “proxied” by female directors on the boards has a positive outcome and significantly affects corporate performance. Hence, consumer goods companies may perform better as a whole if they have more female directors on their boards. The findings are consistent with prior studies and with resource dependency theory. The study suggests that companies with zero female directors should hire them while those with a single female director should consider adding more since corporate performance will be improved as a result.

Received: 14 January 2024 | Revised: 6 May 2024 | Accepted: 16 May 2024

Conflicts of Interest 

The authors declare that they have no conflicts of interest to this work.

Data Availability Statement

The data that support this work are available upon reasonable request to the corresponding author.

Author Contribution Statement

Fatima Gana Mustapha: Conceptualization, Formal analysis, Investigation. Idris Adamu Adamu: Software, Resources, Data curation, Writing – original draft, Writing – review & editing, Visualization, Funding acquisition. Zaharaddin Abdullahi: Methodology, Validation, Supervision, Project administration, Funding acquisition.