Women on boards: an empirical study on the effects on financial performance and corporate social responsibility

Abstract

Purpose The purpose of this study is to investigate whether there is a relationship between women’s presence on boards of directors and companies’ financial performance and corporate social responsibility (CSR) disclosure and, if so, whether this relationship is positive, negative or neutral. Design/methodology/approach The research sample included 47 companies listed on the Palestine Stock Exchange from 2010 to 2020. Panel regression analysis was used to examine the study’s hypothesis and achieve the study’s objectives. Findings The presence of women on the board of directors positively affects a company’s financial performance and disclosure of CSR. However, measuring the CSR disclosure sub-components separately shows a decrease in the disclosure index towards both the environment and employees. Moreover, the level of female representation on the boards of directors of the Palestinian companies studied is generally low. Research limitations/implications Concerning the study limitations, the sample, which comprised all companies listed on the Palestine Stock Exchange from 2010 to 2020, was small. Concerning the implications of the study results, it is recommended that all companies listed on the Palestine Stock Exchange incorporate women on their boards of directors and in their executive management and audit committees. Practical implications The presence of women on Palestinian companies’ boards of directors enhances decision-making policy because of the differences between the genders as well as women’s capacity and unique skills. Originality/value This research contributes to the literature on women’s representation on the boards of directors of the Palestinian companies listed on the Palestine Stock Exchange with the possibility of issuing mandatory instructions for their existence. This study also attempts to provide a better understanding of the financial performance and disclosure of CSR of companies with women on these boards and helps determine whether the relationships between these variables are positive, negative or neutral. Furthermore, this study attempts to determine the extent of these companies’ commitment to the indicators of CSR disclosure.