Two decades of research on board gender diversity and financial outcomes: Mapping heterogeneity and future research agenda

This study seeks to comprehend the sources of substantial heterogeneity in the findings of board gender diversity and firm financial performance over the last two decades. We present an explanatory framework primarily ignored in previous review studies and chronologically review theoretical perspectives, analytical frameworks, measures, associations, and methodologies from 1996 to 2022. We employ a four-step systematic review methodology and a three-point thematic analysis framework. Our findings provide an explanatory framework outlining various channels that impede and facilitate the impact of board gender diversity on firms' financial outcomes. Our review reveals a plethora of descriptive studies that focused solely on one rather than multiple theoretical perspectives, which is a potential limitation and the root cause of heterogeneity in existing study findings. Heterogeneity is also linked with differences across studies in capturing firm performance, statistical inquiry, periods of studies, study samples, gender diversity of independent board members, family or non-family affiliations, omitted variable bias, the proportion of women directors on corporate boards, and economic contexts. Another reason for disparities in existing research is that gender diversity is not the only measure of diversity. Consequently, it is unclear when and which kind of board diversity measure should capture a firm's financial performance. We highlight the significance of the complexity perspective to address the limitation of measuring firm financial performance intently as a function of BGD from a singular theoretical perspective. Further, to better understand the antecedents of BGD, studies should use psychological and behavioural perspectives via an interview-based research design to encapsulate the team and individual attributes of BGD. Based upon our review, we suggest that future research should consider cultural differences to understand the antecedents of BGD on firm financial performance.