Does gender diversity influence the performance of Indian firms: The moderating effect of independent directors?

The present study investigates the relationship between gender diversity and organisational performance in the Indian corporate sector. It further investigates whether independent directors moderate this relationship. For the analysis, panel data is used from 104 BSE Dollex-listed firms over a twelve-year period (2011−2023). Firm performance was assessed using accounting-based measures (ROA and ROE) and market-based measures (Tobins Q and MBV). Multiple regression models were applied to test direct and moderating effects. The study reveals that female directors are negatively associated with ROA but show no significant link with ROE. When independent directors act as moderators, this negative relationship with accounting performance weakens significantly. For market-based measures, female representation is positively related to Tobin's Q, while the association with MBV becomes insignificant after the inclusion of independent directors as moderators. The findings highlight that the existence of independent directors helps to mitigate the adverse relationship between the presence of women directors and firm performance. These findings of the study advances agency and resource dependency theories by showing that independent directors reduce agency costs and enhance resource access linked to gender diversity. Moreover, this is a pioneering endeavour to examine the association between gender diversity and firm performance with the moderating influence of independent directors after the decade-long mandatory appointment of women and independent directors to boards in India. These findings pose important implications for government, lawmakers, corporations, academia, and society. Finally, the robustness of the results has been confirmed through alternative model specifications.