Effect of Board Gender Diversity on Organization Performance. A Critical Literature Review

Abstract

Purpose: Board gender diversity, in essence, is a purposeful initiative to demonstrate an absence of discrimination. Gender diversity and the inclusion of more women in boards of directors and top executive management positions have the potential to add value to organizations. Gender diversity can result in more social sensitivity when solving problems and increased diversity in thought and result in better company performance. When board members include more gender diversity, a firm may increase its chances of effectiveness due to better understanding their stakeholder's needs, leading to better risk management and general business practice. Decision-making is potentially enhanced through adding new ideas and perspectives to board and executive management meetings. The general objective of the study was to establish the effect of board gender diversity on organization performance Methodology: The paper used a desk study review methodology where relevant empirical literature was reviewed to identify main themes and to extract knowledge gaps. Findings: The study found out the gender board diversity affects performance. Moreover gender diversity and the inclusion of more women in boards of directors and top executive management positions have the potential to add value to organizations since there is more social sensitivity when solving problems and increased diversity in thought that result in better company performance Recommendations: The study recommends that when selecting boards members, shareholders should consider having a board that is composed of members from different professions which is expected to provide a diverse view of issues. Moreover, boards should have good representation of female directors to effectively lead and enable the firms to implement its strategies