Do the more women on the board, the higher the firm’s performance during a COVID-19 crisis? Evidence from ASEAN countries

Purpose This study extends the literature on women directors and their impact on firm performance, focusing on developing countries and highlighting practices related to the role of gender diversity and inclusion in corporate governance, especially during a crisis like the COVID-19 pandemic. Design/methodology/approach We analyzed unbalanced panel data with five methods: OLS, fixed effect, random effect, two-stage least squares (2SLS) and the two-step system GMM. Using the Osiris database and annual reports from five Association of Southeast Asian Nations (ASEAN) countries covering 2010 to 2021, we analyzed 2,494 director-firm-year observations and 2,823 firm-year data on 305 firms. Findings We found a positive link between women on the board and firm performance. More women on the board enhance performance, particularly during crises, with a significant boost when three or more women are present. However, the positive impact weakens as the number of women surpasses this threshold. Practical implications This study’s finding can signal that women’s presence can bring better firm performance, although, in emerging economies, the growth of women’s presence on the board needs to be more inclusive. This condition becomes momentum for policymakers and practitioners or organizations to be more aware and count the women’s potential if they sit on the corporate board. These findings give implications and suggestions to the policymaker to make gender quotes at a high level, such as the board of directors under the critical mass theory, which is three women or one-third of the total board. Originality/value This research enhances understanding of how board gender diversity affects firm performance. Specifically, it examines the previously overlooked area of how diversity on boards impacts firms in developing countries facing crises.