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Enigmatic Role of Female Directors on Boards towards Corporate Performance. An Empirical Study

Author

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  • Khan, Areeba
  • Saeed, Sohail

Abstract

Purpose: The presence of female members on boards is quite enigmatic. Almost every academic author argues that female directors’ contribution in the board room is positive and significant, and their presence, improves organizational performance. This study purpose is to figure out the link between female members and organizational performance.Design/Methodology/Approach: For the purpose, Partial least square method of regression is used to develop the relationship.& The measurement and structural model and theories are used to codevelop the formative constructs. Secondary data is used and collected from Pakistan stock exchange. Those KSE-100 companies are used in which female directors were there in any year from 2005 till 2012.Findings: The results reveal that there was a negative relationship, empirically, which strengthened the notion that female directors in Pakistan are just the cosmetic face of board of directors and more female directors on board hinder the firm performance. Female members on the board had negative impact on the financial measures of return on equity and assets turnover.Implications/Originality/Value: This study is helpful for the businesses in Pakistan to rely and utilize the knowledge, innovative skills and experience of female directors rather than to fill the seat as a regulatory requirement.

Suggested Citation

  • Khan, Areeba & Saeed, Sohail, 2021. "Enigmatic Role of Female Directors on Boards towards Corporate Performance. An Empirical Study," Journal of Business and Social Review in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 7(2), pages 311-318, April.
    • Handle: RePEc:src:jbsree:v:7:y:2021:i:2:p:311-318
    DOI: http://doi.org/10.26710/jbsee.v7i2.1659
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