Do Skirts on Board Impact Figures in Books?

Abstract

After the financial crisis of 2007, a wave of discussion started that who sits on board is a critical factor in deciding the success and failure of a company. Research has found links between diverse boards and its positive effects on board inputs (Daniel Ferreira). Countries have rigorously passed laws and legislations without considering the fact there a complex relationship between women on board and performance and several other factors are needed to consider before making a strong assumption. The perceived importance of gender equality in board rooms (Nielson & Huse, 2010) do not points towards a clear opinion on whether gender equality in boardrooms will definitely yield better economic results (Hamdani & Buckley, 2010; Jonas Vob, 2015). A data for FTSE 100 companies was analyzed from 2006-2012 using Random Effects regression model. The results of this research does not support the business case of higher gender diversity for higher profits. This does not imply gender diversity should not be promoted. It is good to have gender diverse boards because of the positive behavioral impact they create on overall environment of an organization. Higher representation of women on board might not relate to the higher profits but diversified boards are critical in better decision making because of the benefit of diverse perspectives’. Equality should be promoted in work environment for ethical reasons and everyone should get a chance to make it to the top level if they are good enough.