You are here

Women do make a difference

A STUDY by the NUS Business School's Centre for Governance, Institutions and Organisations (CGIO) investigated the relationship between board gender diversity and corporate governance score, and between these variables and financial performance, using regression models.

The results of the findings were announced last Friday at a seminar "Resolving the Performance Puzzle of Board Gender Diversity" organised by the Diversity Action Committee (DAC).

Discussions at the seminar centred around the impact of women representation in senior leadership and highlighted how to achieve a more gender diverse leadership for better stewardship and governance.

The study used a combination of publicly available data of director profiles, company corporate governance scores from the Singapore Governance and Transparency Index (SGTI) and company financial performance indicators obtained from Bloomberg.

Key findings

  • Board gender diversity was found to have a positive and statistically significant impact on corporate governance score.
  • Corporate governance score was found to have a positive and statistically significant impact on company financial performance.
  • No direct effect by board gender diversity on company financial performance was found.
  • There is a positive linear relationship between the number of women independent directors and company financial performance. That is, in general, financial performance of companies with more women independent directors would be better than those with fewer or no such women on the board.


  • The findings suggest that board gender diversity has an indirect effect on financial performance, acting through its intermediate effect on corporate governance scores.
  • The results infer probable causality between women on the board and corporate governance score, and as a result to financial performance. The findings are a necessary though not sufficient condition to prove causality.
  • The regression study also provides a framework to make predictions about a company's financial performance based on board gender diversity as well as other explanatory variables pertaining to board and firm characteristics.
  • The effect of the fraction of women independent directors on Tobin's Q (ratio of market value with book value), which was positive and statistically significant, would suggest that companies should pay more attention to the number of women independent directors on their boards.
  • According to the study, if the average number of woman independent directors on boards increases by one, the company's financial performance is expected to increase by 11.8 per cent.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to