Impact of Boards Gender Diversity on Firms Profitability: Evidence from Banking Sector of Pakistan

Abstract

Gender diversity within senior management teams has become an increasingly topical issue. Good corporate decision-making requires diversity of thoughts, which comes from diverse people who have different backgrounds, experiences, and perspectives. Women hold just a small number of corporate board seats. The importance of gender diversification in the context of Pakistan is at its initial stage. Therefore this paper attempts to find out the relationship between the Board’s gender diversity and the firm’s performance particularly in the banking sector of Pakistan. Firm’s performance is measured by Return on Assets (ROA). Our sample size comprises of 6 banks and panel studies are conducted for the period from 2008 till 2012. Analysis is done through descriptive statistics, Correlation and Regression Analysis. Findings of the research show that number of women on board has a significant impact on firm’s performance while percentage of women on board and presence of female CEO has no significant impact on firm’s performance.

Keywords - Corporate Governance, Gender Diversity, Women on Board Number, Women on Board percentage, Female CEO, Firm’s performance.