Equbusiness book VERSION 28SEPT2023 - Flipbook - Page 46
7. GENDER DIVERSITY IN CORPORATE BOARDS;
AN ANALYSIS ON INNOVATION AND FINANCIAL PERFORMANCE
Gender equality on corporate boards has become a key area of focus in recent years, reflecting wider societal
shifts towards equality and inclusivity. So, this chapter examines the imperative policy issue of gender equality
on corporate boards, focusing on its influence on innovation and financial performance. And this summary
integrates the key aspects of our chapter, focusing on the problem, findings, and recommendations while
adhering to the clarity and conciseness required for an executive audience.
Despite progress, women's representation in top management and board positions remains disproportionately
low across various sectors, notably in the BIST Manufacturing sector in Turkey. This study delves into the
complexities of achieving gender balance on boards, motivated by the need to enhance corporate governance,
innovation, and overall firm success. Drawing on resource dependence theory, it argues that diverse boards have
better access to resources and offer different perspectives, leading to more effective risk management and
innovation strategies. By analyzing the relationship between gender diversity, innovation intensity, and financial
performance, we aim to provide empirical evidence to guide policy and corporate decisions.
Our research reveals a noticeable disparity in gender representation on corporate boards, with a significant
portion of firms in the BIST Manufacturing sector lacking female board members. However, the study also
highlights the positive correlation between the presence of women and independent women on boards and
innovation intensity, suggesting that gender diversity fosters a more innovative corporate environment. Despite
this, the direct impact of gender diversity on immediate financial performance remains inconclusive within the
scope of this study. These findings underline the complexity of the relationship between gender diversity,
innovation, and financial outcomes, suggesting that while gender diversity promotes innovation, its direct
translation into financial performance may require further exploration.
Based on our findings, we advocate for more robust policies and corporate practices to enhance gender diversity
on corporate boards. These should include:
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Implementing and enforcing gender quotas to ensure a minimum percentage of women on boards.
Encouraging transparency and disclosure of gender diversity metrics in annual corporate reports.
Providing incentives for companies to adopt gender diversity practices, such as tax benefits or public
recognition.
Supporting leadership development and mentorship programs for women to prepare them for board
positions.
Conducting further research to explore the mechanisms through which gender diversity influences
innovation and financial performance, to guide more targeted interventions.
Enhancing gender equality on corporate boards is not only a matter of social justice but a strategic imperative
for fostering innovation and potentially improving financial performance. Furthermore, the results of the study
suggest that while gender diversity on boards does not directly affect financial performance, it contributes to a
positive corporate image and adherence to corporate governance principles, which indirectly affects
performance. While our study indicates a positive link between gender diversity and innovation, the impact on
financial performance warrants further exploration. By adopting the recommended measures, companies can
not only contribute to achieving gender equality but also potentially harness the benefits of a diverse and
innovative leadership. Unfortunately, today, although women are still a minority in most boards, some of the
woman members are also family members and are only symbolically present in the boards of directors.
