WOMEN AT THE TABLE: ASSESSING THE EFFECT OF GENDER DIVERSITY ON FIRM PERFORMANCE
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This study aims to assess the relationship between female representation on corporate boards and firm financial performance in the context of Bangladesh's emerging economy. While global research presents mixed findings on board gender diversity effects, empirical evidence from developing countries remains limited, particularly in South Asian contexts where cultural and economic factors may influence governance-performance relationships differently than in developed markets. This study employs panel data collected from published annual reports of 74 companies listed on the Dhaka Stock Exchange (DSE) spanning the period 2019-2022, utilizing both www.dsebd.org database and individual company websites for data verification. Panel data regression techniques including fixed effect models, random effect models, and Panel Corrected Standard Error (PCSE) models examine gender diversity effects measured through proportion of women directors, binary presence variables, and Blau heterogeneity index on firm performance proxied by return on assets (ROA) and Tobin's Q ratios. The results demonstrate that female board representation exhibits a significant negative relationship with firm performance indicators, with regression coefficients showing deteriorating performance effects as women's board participation increases. Large firms show no statistically significant relationship between gender diversity and performance metrics, while smaller firms demonstrate significant negative impacts when female family members comprise board positions. The conclusion from this empirical analysis indicates that increased female representation in boardrooms may signal negative market perceptions to shareholders in Bangladesh's developing economy context, particularly for smaller firms where family-based appointments are prevalent. The findings of this study suggest that additional governance variables such as director independence, educational background diversity, and professional experience heterogeneity can be utilized to provide more comprehensive analysis of board composition effects on corporate performance.
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