Gender diversity in leadership and firm performance: evidence from the Czech Republic
The paper examines the effect of gender composition of executive body on financial performance and financial health of the firms. The data of more than thousand Czech travel agencies and tour operators for the period 2008–2015 was employed in the paper. To test the relationship between firm performance and gender diversity in leadership, the regression model was applied. After using alternative measurement for gender diversity of executive body and controlling for firm size, firm age, executive body size, leverage ratio and industry, the results have shown that the gender composition of executive body has no statistically significant effect on both firm performance and financial health of firms. The study deepens empirical knowledge about the relationship between gender diversity of executive body and corporate performance and financial health and brings new insights into the link between these phenomena in the Czech Republic.
First published online 17 November 2020
This work is licensed under a Creative Commons Attribution 4.0 International License.
Agiomirgianakis, G., Voulgaris, F., & Papadogonas, T. (2006). Financial factors affecting profitability and employment growth, the case of Greek manufacturing. International Journal of Financial Services Management, 1(2/3), 235–245. https://doi.org/10.1504/IJFSM.2006.009628
Ahern, K. R., & Dittmar, A. K. (2012). The changing of the boards, The impact on firm valuation of mandated female board representation. The Quarterly Journal of Economics, 127(1), 137–197. https://doi.org/10.2139/ssrn.1364470
Altman, E. I. (1983). Corporate financial distress, a complete guide to predicting, avoiding, and dealing with bankruptcy. Wiley Interscience, John Wiley and Sons.
Altman, E. I., Iwanicz-Drozdowska, M., Laitinen, E. K., & Suvas, A. (2017). Financial distress prediction in an international context, a review and empirical analysis of Altman’s Z-Score model. Journal of International Financial Management & Accounting, 28(2), 131–170. https://doi.org/10.1111/jifm.12053
Arfken, D. E., Bellar, S. L., & Helms, M. M. (2004). The ultimate glass ceiling revisited: The presence of women on corporate boards. Journal of Business Ethics, 50(2), 177–186. https://doi.org/10.1023/B:BUSI.0000022125.95758.98
Audet, L., Miller, J. C., & Appalbaum, S. H. (2003). Gender and leadership? Leadership and gender? A journey through the landscape of theories. Leadership & Organization Development Journal, 24(1), 43–51. https://doi.org/10.1108/01437730310457320
Beltran, A. (2019). Female leadership and firm performance. Prague Economic Papers, 28(3), 363–377. https://doi.org/10.18267/j.pep.695
Blau, P. M. (1977). Inequality and heterogeneity, a primitive theory of social structure. Free Press.
Campbell, K., & Bohdanowicz, L. (2015). Corporate governance and the growing role of women in the boardroom. In M. Aluchna & G. Aras (Eds.), Transforming governance: new values, new systems in the new business environment (pp. 121–142). Gower.
Campbell, K., & Mínguez-Vera, A. (2008). Gender diversity in the boardroom and firm financial performance. Journal of Business Ethics, 83(3), 435–451. https://doi.org/10.1007/s10551-007-9630-y
Carter, D. A., Simkinns, B. J., & Simpson, W. G. (2003). Corporate governance, board diversity, and firm value. The Financial Review, 38(1), 33–53. https://doi.org/10.1111/1540-6288.00034
Černík, D. (2016). Gender board diversity and its impact on firm performance in the Czech Republic (Bachelor thesis). Charles University, Prague, Czech Republic.
Christiansen, L., Lin, H., Pereira, J., Topalova, P., & Turk, R. (2016). Gender diversity in senior positions and firm performance, evidence from Europe (IMF Working Paper No 16/50). International Monetary Fund. https://doi.org/10.5089/9781513553283.001
Coad, A., Segarra, A., & Teruel, M. (2013). Like milk or wine. Does firm performance improve with age? Structural Change and Economic Dynamics, 24(1), 173–189. https://doi.org/10.1016/j.strueco.2012.07.002
Cook, A., & Glass, C. (2014). Women and top leadership positions: Towards an institutional analysis. Gender, Work & Organization, 21(1), 91–103. https://doi.org/10.1111/gwao.12018
Deloitte. (2017). Missing pieces report: The 2016 board diversity census of women and minorities on fortune 500 boards. http://www2.deloitte.com/us/en/pages/center-for-board-effectiveness/articles/board-diversity-census-missing-pieces.html
Deloitte. (2017a). Women in the boardroom: A global perspective (5th ed). https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/risk/deloitte-cn-ra-ccg-e1-women-in-the-boardroom-a-global-perspective-fifth-edition.pdf
Desvaux, G., Devillard, S., Labaye, E., Sancier-Sultan, S., Kosseff, C., & Zelicourt, A. (2017). Women matter: Time to accelerate. Ten years of insights into gender diversity. https://www.mckinsey.com/
Devillard, S., Graven, W., Lawson, E., Paradiso, R., & Sancier-Sultan, S. (2012). Women matter 2012: Making the breakthrough. https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Organization/Our%20Insights/Women%20matter/Women_matter_mar2012_english%20(1).pdf
Dytrt, Z. (2013). Ženy a management [Women and management]. Bizbooks.
Ellwood, E., & Garcia-Lacalle, J. (2015). The influence of presence and position of women on the boards of directors: The case of NHS foundation trusts. Journal of Business Ethics, 130, 69–84. https://doi.org/10.1007/s10551-014-2206-8
European Commission. (2012). Proposal for a Directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52012PC0614
Flabbi, L., Macis, M., Moro, A., & Schivardi, F. (2019). Do female executives make a difference? The impact of female leadership on gender gaps and firm performance. The Economic Journal, 129(622), 2390–2423. https://doi.org/10.1093/ej/uez012
Gallucci, C., D’Amato, A., & Santulli, R. (2015). Women on board of directors and firm performance: The moderating role of female ownership. Empirical evidence from the Italian wine industry. Journal of Financial Management Markets and Institutions, 3(2), 225–244.
Green, C. P., & Homroy, S. (2018). Female directors: Board committees and firm performance. European Economic Review, 102, 19–38. https://doi.org/10.1016/j.euroecorev.2017.12.003
Grosvold, J., & Brammer, S. J. (2010). National institutional systems as antecedents of female board representation: An empirical study. Corporate Governance: An International Review, 19(2), 116–135. https://doi.org/10.1111/j.1467-8683.2010.00830.x
Guest, P. M. (2009). The impact of board size on firm performance: Evidence from the UK. The European Journal of Finance, 15(4), 385–404. https://doi.org/10.1080/13518470802466121
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206. https://doi.org/10.5465/amr.1984.4277628
Haslam, S. A., Ryan, M. K., Kulich, C., Trojanowski, G., & Atkins, C. (2010). Investing with prejudice: The relationship between women’s presence on company boards and objective and subjective measures of company performance. British Journal of Management, 21, 484–497. https://doi.org/10.1111/j.1467-8551.2009.00670.x
He, J., & Huang, Z. (2011). Board informal hierarchy and firm financial performance: Exploring a tacit structure guiding boardroom interactions. Academy of Management Journal, 54(6), 1119–1139. https://doi.org/10.5465/amj.2009.0824
He, X., Inman, J. J., & Mittal, V. (2007). Gender jeopardy in financial risk taking. Journal of Marketing Research, 44, 414–424. https://doi.org/10.1509/jmkr.45.4.414
Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource dependence theory: A review. Journal of Management, 35(6), 1404–1427. https://doi.org/10.1177/0149206309343469
Hofstede Insights. (2019). Country comparison. https://www.hofstede-insights.com/country/czech-republic/
Hult, G. T. M., Ketchen, D. J., Griffith, D. A., Chabowski, B. R., Hamman, M. K., Dykes, B. J., Pollitte, W. A., & Cavusgil, S. T. (2008). An assessment of the measurement of performance in international business research. Journal of International Business Studies, 39(6), 1064–1080. https://doi.org/10.1057/palgrave.jibs.8400398
Ibhaguia, O. V., & Olokoyob, F. O. (2018). Leverage and firm performance: New evidence on the role of firm size. North American Journal of Economics and Finance, 45, 57–82. https://doi.org/10.1016/j.najef.2018.02.002
Janošová, L., & Mikuš, P. A. (2018). Relationship between gender and age diversity among board members and firm performance. In J. Nesleha, F. Hampl, & M. Svoboda (Eds.), 15th International Scientific Conference on European Financial Systems 2018 (pp. 202–209). Masaryk University.
Joecks, J., Pull, K., & Vetter, K. (2013). Gender diversity in the boardroom and firm performance: What exactly constitutes a ‘critical mass’? Journal of Business Ethics, 118(1), 61–72. https://doi.org/10.2139/ssrn.2009234
Kalsie, A., & Shrivastav, S. M. (2016). Analysis of board size and firm performance: Evidence from NSE Companies using panel data approach. Indian Journal of Corporate Governance, 9(2), 148–172. https://doi.org/10.1177/0974686216666456
Kanter, R. (1977). Some effects of proportions on group life, skewed sex ratios and responses to token women. American Journal of Sociology, 82(5), 965–990. https://doi.org/10.1086/226425
Khan, W. A., & Vieito, J. P. (2013). CEO gender and firm performance. Journal of Economics and Business, 67, 55–66. https://doi.org/10.1016/j.jeconbus.2013.01.003
Konečný, L., & Částek, O. (2016). The effect of ownership structure on corporate financial performance in the Czech Republic. Ekonomický Časopis, 64(5), 477–498.
Křížková, A. (2003). Kariérní vzorce žen v managementu. Strategie žen v rámci genderového režimu v organizaci. Sociologický časopis, 39(4), 447–469. https://doi.org/10.13060/00380288.2003.39.4.02
Kuncová, M., Hedija, V., & Fiala, R. (2016). Firm size as a determinant of firm performance: The case of swine raising. Agris on-line Papers in Economics and Informatics, 8(3), 77–89. https://doi.org/10.7160/aol.2016.080308
Lee, C., & Farh, J. (2004). Joint effects of group efficacy and gender diversity on group cohesion and performance. Applied Psychology, 53(1), 136–154. https://doi.org/10.1111/j.1464-0597.2004.00164.x
Lückerath-Rovers, M. (2013). Women on boards and firm performance. Journal of Management & Governance, 17(2), 491–509. https://doi.org/10.1007/s10997-011-9186-1
Machek, O. (2013). Long-term predictive ability of bankruptcy models in the Czech Republic: Evidence from 2007–2012. Central European Business Review, 3(2), 14–17. https://doi.org/10.18267/j.cebr.80
Majumdar, S. K. (1997). The impact of size and age on firm-level performance: Some evidence from India. Review of Industrial Organization, 12(2), 231–241. https://doi.org/10.1023/A:1007766324749
Melsom, A. M. (2015). The gender of managers and sickness absence. Sagen Open, 5(1), 1–12. https://doi.org/10.1177/2158244015574208
Miller, T., & del Carmen Triana, M. (2009). Demographic diversity in the boardroom: Mediators of the board diversity-firm performance relationship. Journal of Management Studies, 46(5), 755–786. https://doi.org/10.1111/j.1467-6486.2009.00839.x
Neumaierová, I., & Neumaier, I. (2005). Index IN05. In P. Červinek (Ed.), Sborník příspěvků z mezinárodní vědecké konference Evropské finanční systémy (pp. 143–148). Masaryk University.
Pasaribu, P. (2017). Female directors and firm performance: Evidence from UK listed firms. Gadjah Mada International Journal of Business, 19(2), 146–166. https://doi.org/10.22146/gamaijb.15619
Pfeffer, J. (1972). Size and composition of corporate boards of directors: The organization and its environment. Administrative Science Quarterly, 17(2), 218–228. https://doi.org/10.2307/2393956
Phillips, P. A., & Sipahioglu, M. A. (2004). Performance implications of capital structure; evidence from quoted U. K. organisations with hotel interests. The Services Industry Journal, 24(5), 1–21. https://doi.org/10.1080/0264206042000276829
Public Opinion Research Center. (2016). Public opinion on the role of men and women in family – February 2016. https://cvvm.soc.cas.cz/en/press-releases/other/relations-attitudes/4106-public-opinionon-the-role-of-men-and-women-in-family-february-2016
Radu, C., Deaconu, A., & Frasineanu, C. (2017). Leadership and gender differences-are men and women leading in the same way? In A. Alvinius (Ed.), Contemporary leadership challenges (pp. 63–81). IntechOpen. https://doi.org/10.5772/65774
Rose, C. (2007). Does female board representation influence firm performance? The Danish evidence. Corporate Governance, 15(2), 404–413. https://doi.org/10.1111/j.1467-8683.2007.00570.x
Shrader, C. B., Blackburn, V., & Iles, P. (1997). Women in management and firm financial performance: An exploratory study. Journal of Managerial Issues, 9(3), 355–372.
Torchia, M., Calabro, A., & Huse, M. (2011). Women directors on corporate boards: From tokenism to critical mass. Journal of Business Ethics, 102, 299–317. https://doi.org/10.1007/s10551-011-0815-z
Virtanen, A. (2012). Women on the boards of listed companies: Evidence from Finland. Journal of Management & Governance, 16(4), 571–593. https://doi.org/10.1007/s10997-010-9164-z
Wang, Y.-H. (2020). Does board gender diversity bring better financial and governance performances? An empirical investigation of cases in Taiwan. Sustainability, 12(8), 3205. https://doi.org/10.3390/su12083205