Impact of Gender Diversity on the Board of Directors on the Financial Performance of the Chinese Private Water Companies

Abstract

China is facing an acute portable water problem and presents a picture of severe supply constraints. Thus, China's water crisis offers attractive business opportunities for foreign water companies as well as domestic private water companies. Hence, the private sector participation in the Chinese water sector is a hot topic. This chapter investigates the impact of gender diversity on board of directors on the financial performance of the Chinese private water companies using ordinary least squares (OLS) and unbalanced panel (random effects) regression models, which are estimated as the baseline approach on a sample of 19 Chinese private water companies for the period of 2010-2017. The OLS and random effects results show that number of women on board (WB), percent of women on board (%WB), number of female executives (FE), and percent of female executives (%FE) affect the Chinese water companies' financial performance. The results of this chapter are important for researchers, regulators, and policymakers to benefit from policies that encourage board varieties at an individual water company level.