Do Women in Top Management Affect Firm Performances? Analysis of Public Quoted Companies in Sri Lanka

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There are m any studies in the linkage between w om en’s participation in director board and its im pact on firm ’s financial perform ance in the setting o f developed economies. Conversely, the shortfall o f literature and the lack o f know ledge regarding this issue in developing econom ies m otivated to undertake the current study. Hence this study makes contribution to the literature by addressing the nature in a developing econom y with reference to the Sri Lankan context. The main objective o f the study is to examine the relation between w om en’s participation in director board and its impacts on the financial perform ance o f firms in Sri Lanka. The quantitative research approach, using panel data regression analysis w as em ployed for the study. The sample was thirty Sri Lankan firms w hich are listed in the Colombo Stock Exchange from 2011-2015. The quantitative data w ere taken from the annual reports o f the sample firms and it was analyzed using E-views 07 under pooled OLS m ethod and Fixed Effect model. The agency theory, stewardship theory and resource dependence theory were used to explain the relationship between gender diversity in the board room and firm ’s financial perform ances. The return on assets w as the proxy for firm ’s financial perform ances and proportion o f female directors in the director board and board size w ere explanatory variables. The control variables w ere firm size denoted by the total assets, m arket value denoted by the Tobin’s Q ratio and the market price per share. The results o f the Pooled OLS reflected that there is a significant positive relationship between gender diversity o f the director board and firm ’s financial perform ances. The fixed effect model also revealed the positive association betw een gender diversity o f the director board and firm ’s financial perform ances, but it is not significant.