THE INFLUENCE OF BOARD GENDER DIVERSITY IN CORPORATE GOVERNANCE ON FIRM PERFORMANCE AND FIRM RISK TAKING

Abstract

This study examined the impact of female members on board of commissioner and board of director on firm performance and firm risk taking in Indonesia. From Banks listed in Otoritas Jasa Keuangan from 2015 until 2017 there were 84 banks, with 252 samples observed. This study used the multiple regression method. The model was modified from 8 recent articles published between 2014 and 2018. The results indicate that female boards of these banks in had negative influence to the financial performance and firm risk taking as measured by return on assets, equity to assets, and non-performing loan. Limited empirical studies have been conducted on the relationship between board gender diversity on firm performance and risk taking. Therefore, there was still no consensus regarding the link between board gender on firm performance and risk taking based upon mixed and contradictory in previous studies. Therefore, this study extended the current literature in the context Banks in Indonesia, showing that female on the board did not enhance the financial performance and risk taking of a company.