Board Gender Diversity and Financial Performance in Developing Countries: Evidence from the Ethiopian Banking Sector

The topic of board gender diversity has drawn the attention of academics, organizations, and regulators alike. Such heightened awareness of the subject has produced a favorable atmosphere for gradual growth in women’s participation in boardrooms worldwide. Countries have even taken the initiative to legalize boardroom quotas to increase the proportion of females in the boardroom of organizations. The current study investigated the effect of women’s boardroom representation on the financial well-being of banks. The study considered fourteen commercial banks in Ethiopia as a sample. The study period ran from 2013 to 2020. The study employed OLS and fixed effect regression for analysis and found out that the representation of women in the boardroom of banks pays off. The result is robust for alternative measures of financial performance. The outcome of the study has far-reaching implications for policymakers and managers of financial institutions. Ethiopia’s financial regulators should push for legislated boardroom quotas to enhance the representation of women in the boards of banks. Additionally, banks should make the appointment of additional female board members a priority. The study also contributes new insights to the body of knowledge already available on the subject.