Women’s Leadership in Challenging Times: Examining the Influence of Female Directors on Firm Performance Amidst Economic Turbulences

Despite extensive research on the impact of women’s presence on boards on financial performance, limited attention has been given to this topic during times of crisis. To address this gap, this study capitalizes on the economic crisis triggered by the COVID-19 pandemic. The empirical analysis utilizes a sample of publicly traded US firms covering the period from 2017 to 2022. The study reveals that a larger representation of female directors on the board did not lead to improved performance during the COVID-19 crisis. Similar results are reported when only female executive directors are considered. In non-crisis years, gender diversity on the board or restricted to executive directors showed either neutral or negative effects on accounting-based performance indicators, while demonstrating neutral or positive effects on market-based performance indicators. To mitigate potential endogeneity concerns, instrumental variable estimations were performed. The results remained robust across a range of sensitivity checks.