Women on Boards and Firm Performance in Egypt: The Market Does Not Discriminate

• In Event: Continental Breakfast & Research and Education Forum
  In Paper Session: Table 3: Corporate Governance

Abstract

There has been an increased buzz about policy mandating women participation on boards (WOB) worldwide. The recent period has witnessed growing research examining the impact of female board membership on firm value, but the evidence remains inconclusive. In a market whereby women’s presence in top positions remains lesser socially acceptable, the need to investigate the impact of such policy mandates is even greater. Using a unique dataset, we investigate the impact of women board diversity on firm performance on a sample of 114 Egyptian firms, which represent all Egyptian publicly listed firms with data available for the year 2013. After accounting for firm size, board size, industry, CEO duality, and board member independence, our findings reveal a positive significant association between percentage of women on board (WOB) members and firm value (ROE) and also for robustness, we used Tobin Q as an alternate measure. We also find this direct effect to be positively moderated by industry (service sector). The results highlight that despite social barriers to female leaders, the impact of female board membership on firm value is positive when value is measured by ROE and Tobin q. The paper provides implications for management policies to prepare more females for senior roles and address the negative preconceptions about expected market reactions to the appointment of females on boards.

Key Words: Gender, Diversity, Boards, Arab, Egypt, Firm Value, Corporate Governance.
 

Authors

• Angie M AZaher, American University Cairo

• Dina M Abdel Zaher, University of Houston-Clear Lake