The relationship between female directorship and organizational performance: evidence from China
The influence of female board members on organizational performance has been an area of significant research, with some researchers finding a positive correlation between the two variables, some finding no correlation and others finding a negative correlation. This study used publically available information on companies in China from the period of 2002 to 2012, to examine the relationship between female board representation and company performance. The performance of the organization was measured using Return on Equity (ROE) and Tobin’s Q, which are reliable measures of company performance. Regression analysis was used to examine which factors had a significant influence on the performance of the organization. The study found that despite a significant relationship between female board representation and the proportion of independent directorship, neither female board representation nor the proportion of independent directorship had any significant influence on the performance of the organization. This outcome may be the result of Chinese cultural factors, suggesting that females play only a token role on boards, rather than having the ability to influence the behavior or performance of the board. This research suggests that it is important for studies looking at the influence of female board members to carefully consider differences across organizations and the influence of culture on how well females are accepted within organizations.