Abstract:
Despite the national and global significance of state-owned entities, the governance
of these entities has received meagre scholarly attention to understand how different
governance arrangements may impact their performance. In response, this study
employs quantitative methods to determine the impact of board gender diversity (as
a component of corporate governance) on non-financial performance of state-owned
entities.
Using cross-sectional data from a sample of 136 state-owned entities in South
Africa, the results show that the board gender diversity of state-owned entities does
not have a statistically significant relationship with non-financial performance of
these entities, even when there is a critical mass of three or more women on the
board. This challenges two alternative prevailing views of the impact of board gender
diversity on performance; firstly, that more diverse perspectives on the board
enables better organisational performance and secondly, that more diverse views
lead to more disagreements, less effective boards and poorer organisational
performance.
Overall, the findings suggest that alternative corporate governance mechanisms
may be more suitable for SOEs in emerging economies. Researchers should
therefore direct focus towards identifying other mechanisms for enhancing the nonfinancial
performance of state-owned entities, while policymakers can comfortably
appoint gender-diverse boards to advance gender equality in society.
