Exploring the Impact of Board Gender Diversity on Profitability for Egyptian Corporations

Abstract

In developed countries, diversity of corporate boards has been the subject of public and regulatory focus, the ethnic and gender diversity grabbed a particular interest.

Researchers have begun to turn their attention to the reasons corporations may seek to increase women representation on their boards which is still far below their numbers in the population and the workforce.

This research identifies factors which lead Egyptian companies to appoint women directors, and examines the impact of increased women representation on corporate profitability.

The results show that some factors positively impact nominating women directors. Those factors are; advanced education, owning a variety of work experience, membership in /certified from professional organizations, having the right connections either political or business, having a record of accomplishments, ability to devote quality time, and finally, younger women is preferable for board positions. Although the participation of women directors in the most active publicly traded 50 companies in the Egyptian market doesn’t seem to have statistically significant impact on profitability or share prices, firms with women directors outperformed average profitability ratios.

This finding calls for further researches with wider sample, considering different factors such as number of women directors serving on every board. Some recommendations were reached to be implemented by the market players.

Keywords: Corporate Governance, Gender Diversity, Board of Directors, Profitability