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Research Article Open access CC BY 4.0

Female Directors and Firm Performance: Evidence of Family Firm in Indonesia

Arif Pratama Marpaung, Murviana Koto, Muhammad Shareza Hafiz, Rizki Hamdani

Asian Journal of Economics, Business and Accounting · pp. 19–30 · Published 5 Jan 2022

10.9734/ajeba/2022/v22i130538

Abstract

The purpose of this study is to determine the effect of female board of directors on company performance. Using a sample of 144 family firms in Indonesia in the period 2018 to 2020. This study examines the relationship between female directors and corporate accounting (ROA and ROE) and market-based performance (Tobin's Q). This study uses a panel data approach with OLS measurements and fixed effects model measurements. This study found that female ownership significantly lowers Tobin's Q. While female CEOs have a negative effect on ROA. Furthermore, the ownership and presence of women on the board has no effect on ROA. In measuring company performance as proxied by ROE, it was found that women's ownership, the presence of women on the board, and women's leadership had no effect. Studies on the relationship between gender diversity and financial performance in the context have been carried out in developed economies. This study contributes to the literature related to corporate governance in family companiexs, especially gender diversity in countries with developing economies such as Indonesia. we recommend looking at the role of women in risk and innovation to be able to see the role of opportunities in other fields that can provide evidence that women can advance the company.

Female directorship firm performance gender diversity family firms

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