Does board gender diversity impact financial performance? Evidence from the Indian IT sector
ISSN: 1746-5680
Article publication date: 30 June 2022
Issue publication date: 2 February 2023
Abstract
Purpose
This study aims to evaluate the impact of gender diversity on corporate boards on firms’ financial performance in the context of the Indian information and technology (IT) sector. The Companies Act 2013 brought forth mandatory provisions for the appointment of women directors for a certain class of companies. This study explores the case of board gender diversity in the Indian IT sector’s unique setting.
Design/methodology/approach
The study uses a fixed effect panel data regression model to achieve its objectives. Two widely used diversity measures, Blau Index and Shannon Index, have been used to enhance the robustness of the results.
Findings
The results of the study indicate an insignificant relationship between gender diversity and firms’ financial performance. Even the diversity indices portray insignificant results confirming the outcomes of the study. The study indicates that IT sector firms have not been able to leverage the benefits of board gender diversity.
Research limitations/implications
The results of the study have important policy implications for the government, regulatory bodies and corporates. The outcomes point out that the benefits that could have accrued based on the diversity aspect could not be harnessed, as the women’s representation on corporate boards is extremely low. Policymakers and government shall focus on devising stringent laws so that better representation of women directors can be used for the interests of the firms.
Originality/value
The study is an attempt to fill the gap in the extant literature which has a scarce number of studies conducted in the unique setting of the IT sector (both in developed and developing economies). To the best of the authors’ knowledge, this is the first study on the influence of board gender diversity in the IT sector of a developing economy, backed by socio-cultural reasons.
Keywords
Acknowledgements
The authors would like to acknowledge the constant support of Professor Debbie Haski Leventhal Editor in Chief Society and Business Review for her constant support throughout the review process. The authors would also like to thank the two anonymous reviewers for their constructive feedback and suggestions which helped us in the improvement of this research article.
Citation
Singh, J., Singhania, S. and Aggrawal, D. (2023), "Does board gender diversity impact financial performance? Evidence from the Indian IT sector", Society and Business Review, Vol. 18 No. 1, pp. 51-70. https://doi.org/10.1108/SBR-09-2021-0164
Publisher
:Emerald Publishing Limited
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