Women who money: the impact of female board members and institutional ownership on firms’ financial performance

Purpose This study aims to explore the relationship between board diversity and financial performance, examining how the presence of women on corporate boards affects metrics such as profitability. In addition, this study investigates how corporate governance and ownership structure influence gender diversity policies and the appointment of women to boards. Design/methodology/approach Two hypotheses were proposed and following regression models were developed for data analysis. The sample for this study consists of companies listed on the Taiwan Stock Exchange in five years (2015–2019). The data was extracted from the Taiwan Economic Journal Taiwan database with the final data set comprised 9,379 firm-year observations. Findings This study indicates a positive association between board diversity and financial performance. Moreover, the relationship between female directors on the board and financial performance is stronger for firms with a higher percentage of institutional investors. Originality/value By highlighting how gender-balanced boards and engaged institutional shareholders improve profitability, this study suggests that actively recruiting women directors and pursuing governance reforms that empower shareholders can pay dividends for Taiwanese companies. The results make an important contribution to the limited research on diversity's impact within Asian corporate settings.