Correlation between women representation on board and company performance

Abstract

Researchers cannot provide us with the definite answer whether board diversity influences company performance or not. Findings are very controversial and have many limitations, such as causality direction, comparability of data and variety of the research methods. This paper is going to examine the relationship between women representation on board and company performance. Performance factors used in this research are revenue, ROI, ROE, ROA, firm value and innovation. Data from 46 companies from S&P500 was analysed to identify the relationship between performance and board diversity. The correlation coefficient was found with Excel formula and significance level identifying suitability of data was found from ANOVA table after running regression analysis. Hypotheses were made on the basis of theoretical assumptions and previous findings and had to be rejected after conducting quantitative analysis. Secondary sources used for the research mainly included articles on the previous similar works, annual reports and financial databases. This research has identified no statistically significant correlation exists between any of the performance factors used and women representation on board. Even though weak correlations either with positive or negative direction were found, the extent of correlation aka p-value aka Significance F was too high making results statistically insignificant and not suitable for use.