Gender Diversity: An Issue of Concern

Gender Diversity: An Issue of Concern

Qaiser Rafique Yasser (Preston University, Islamabad, Pakistan) and Abdullah Al-Mamun (University of Wollongong, Australia)
DOI: 10.4018/978-1-7998-6669-5.ch007
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Abstract

Gender diversity is a new and challenging issue of research in business. Women on boards are a heavily discussed topic in developed countries, though this issue has recently appeared to gain the attention of researchers in developing economies as well. However, research on gender diversity in Malaysia is limited. This study aims to examine whether female directors on boards can affect firm performance based on selected public listed companies in Malaysia. In examining the effect of gender diversity on firm performance, Pearson correlation coefficient and regression analysis tests are employed using economic value added (EVA) as a measurement tool. This study found no relationship between gender diversity and firm performance. Given this, future studies should try to consider other aspects of corporate governance.
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Literature Review

One interesting study area for many researchers over the last few decades has been gender diversity (Elgart, 1983; Wall Street Journal, 1986). Research on female members on boards has gained significant attention in recent years. Though studies have claimed that the number of women is increasing on boards (Heidrick & Struggles, 1986; Vance, 1983), there are still optimistic and pessimistic views as to what this trend represents. The optimistic expression presumes that the increasing number of female Chief Executive Officers (CEOs) or board members is a signal of transition in women’s role as top executives (Spencer, 1984), while the pessimistic opinion claims that though the actual number of women on board has been increasing, proportionately it is still not notable (Wall Street Journal, 1986). Those of the latter view claim that women are not an anomaly in the corporate board room as they were just a decade ago, when only 13% of the 1350 major American companies had a female director, while it jumped up to 41% in one year in 1987. However, the recent picture is more surprising, showing that 85% of firms in the US have female board members.

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