The impact of board gender diversity on non-financial performance of stateowned entities

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.