Board Gender Diversity and Firm Performance: Role of Organisational Complexity, Institutional Investors and Industry Downturns
Lee, Kin Wai, and Thong, Tiong Yang (2026) Board Gender Diversity and Firm Performance: Role of Organisational Complexity, Institutional Investors and Industry Downturns. Asian Academy of Management Journal of Accounting and Finance, 22 (1). pp. 1-35.
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Abstract
Prior studies provide mixed evidence on the effects of board gender diversity on firm valuation. To address this gap in the literature, we posit that the association between board gender diversity and firm performance is conditional on contextual factors, such as organisational complexity, institutional ownership and industry downturns. Using a sample of listed firms in Asia from 2015 to 2023, our empirical regressions document that firm valuation is positively associated with the proportion of female directors on a board. More importantly, we find that the positive association between firm valuation and the proportion of female directors on the board is higher in firms with higher organisational complexity, firms with higher equity ownership by institutional shareholders and during industry downturns. Additional analysis shows that firm risk is lower in firms with higher board gender diversity. Moreover, we find that the negative association between firm risk and the proportion of female directors on the board is stronger in firms with higher organisational complexity, firms with higher equity ownership by institutional shareholders and during industry downturns. Our results are robust to alternative measures of firm performance, model specifications and endogeneity concerns. In summary, our results suggest the firm-level characteristics such as organisational structure, ownership structure and industry downturns are important moderators of the board gender diversity and firm performance relationship. Our study contributes to the literature on corporate governance in Asia and provides practical implications for policymakers, board of directors and investors, emphasising the importance of organisational structure, ownership structure and industry downturns in shaping the relationship between board gender diversity and firm performance.
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