Gender Diversity in Corporate Boards: A Systematic Literature Review

Abstract

This study reviews the extant literature on gender diversity on corporate boards (board gender diversity) and the theories and variables that affect financial performance compared to developed and emerging economies. This systematic literature review was based on the 39 peer-reviewed articles retrieved from the Google Scholar, Scopus, and Science Direct databases on gender diversity in corporate boards. This review found stern debates about the effect of board gender diversity on the firm's financial performance, and the results are ambiguous from the early to recent studies. Different indicators such as ROA, ROE, and Tobin Q are used to measure the firm financial performance implication of having female directors on corporate boards, and findings are no significantly proven direct association between women's representation on the board and the firm performance in both developed and emerging countries. However, on the contrary, the literature supported the conclusion that certain traits of women, risk aversiveness, detailed and depth analysis and monitoring, independence, unique skills, and functional expertise have positively influenced to enhance the firm's financial performance as a mediating factor. This paper contributes to the growing literature on board gender diversity, providing a further understanding of genetic factors that influence the firm's financial performance. It also offers insights to regulators on potential limitations and the benefits of gender quota legislation. However, future researchers must expand on women's empowerment toward governing structure changes.