Gender Distribution on Boards and Company’s Performance: do women on company boards impact the business’ financial performance?

Abstract: Purpose: The purpose of this thesis is to examine the impact of diverse boards with one, two, three or more women in limited companies founded in Sweden in 2010 on financial performance. Firm’s characteristics as board’s gender distribution, net sales, ROE, board size and number of employees will be examined aiming to understand how these boards are composed in terms of gender diversity and the impact of it on firm’s performance. This research aims to offer a different approach for gender diversity studies in the field of new ventures. Methods: This thesis comprises a quantitative analysis based on data from the Swedish Tax Agency. The data was collected from Retriever Database, containing all limited companies (AB) founded in Sweden in 2010 (and still operating in 2015) that had 3 or more board members. This study’s dependent variable is net sales. Its independent variables are boards with one woman, boards with two women and boards with three or more women. As control variables ROE and the number of employees have been observed among others. Findings: Using our initial research model we were not able to confirm some theoretical expectations that were tested by the hypothesis. However, alternatives analysis to the initial model has shown that boards with 4 women on its boards have better performance than other boards in comparison to our reference category of boards with 0 woman. Implications: This study demonstrates that it is essential to study gender on boards taking into account the absolute number of women in it. Also, as it shows that even in newly started companies having 4 women on the boards impacts performance positively, it adds new elements to entrepreneurs cognitive framework, stressing the importance to attract more women professionals to the board since the very beginning. We also explored the industry impact on it and we observed great discrepancy between industries. We would recommend these differences among industries to be studied with more attention in future studies. Keywords: Gender composition; women on boards; company performance