Impact of Gender Diversity on Indian Firm’s Financial Performance

Abstract

Gender diversity has tremendously gained attention in the corporate world both among policy makers and researchers. This is because it has been believed that gender diverse board brings different perspectives of idea to the board which enhances the firm financial performance. The purpose of this research is to examine the impact of gender diversity on Indian firm’s financial performance. The research has been carried out on 21 female dominated companies (having more than 10% female director’s) and 21 male dominated companies (having less than 10% female directors) listed on Bombay Stock Exchange (BSE) with total population of 220 companies spread across different industry segment from both public and private sectors. This research employed cross-sectional data for a period of 2017 and used stratified proportionate random sampling technique. The dependent variable firm financial performance adopted by the study used accounting base-return which is measure by Return on asset (ROA) and Return on equity (ROE). This study adopted an explanatory research design and secondary data was collected and analyzed through independent samples test and Group statistics using SPSS software. This research found that increasing number of female directors has a negative significant impact on ROA. Additionally, the study found increasing number of female directors has a positive significant impact on ROE. This research is limited in relying on cross-sectional data. It was recommended that future researchers should consider using longitudinal data and also investigate other variables that were not included in this study such as female CEO, women age, educational qualification of the female directors, Return on sales and net profit margin.

Keywords

• gender diversity
• number of female directors
• roa
• roe