Women on management board and firm performance: Evidence from the Visegrad Group companies

Objective: The aim of this study is to investigate the relationship between the presence of women on management boards and firm performance in publicly traded companies within the Visegrad Group countries during the 2019-2021 period. Research Design & Methods: The study focuses on 451 publicly traded companies in the Visegrad Group countries over the 2019-2021 period, examining the composition of management boards in terms of gender diversity. The study uses four types of characteristics to describe the management board's composition, including the presence of women on the board, the percentage of female directors, Blau's index of heterogeneity, and the gender of the CEO. The t -tests, Mann -Whitney U tests, and data regression are applied to investigate the influence of female managers on company efficiency, as well as market performance. Findings: The data shows that only 32.8% of companies have at least one woman on their management board and the average share of women on these boards is low at 12%. We found a positive relationship between operating efficiency and the percentage of women on the management board and board gender diversity, but no statistically significant association between women's presence on the management board and market performance. Our study supports the hypothesis that a woman's presence on the management board affects firm performance. Implications & Recommendations: The findings can be valuable and may have practical implications for policymakers and company executives. Policymakers can use this information to support and promote policies that encourage gender diversity in corporate leadership. Companies interested in promoting diversity can use this information to support their efforts to increase female representation on their management boards and potentially improve their performance. Contribution & Value Added: This study contributes to the ongoing discussion on gender diversity in corporate leadership and its potential impact on firm performance. Thus, it might affect the behaviour of companies operating in similar institutional environment, namely in Visegrad Group countries. We used different measures of firm performance - both based on the operating (accounting) data and market data. We included several measures of women's presence on the boards (e.g. Blau index or women as the CEO).