Abstract
As research on board diversity as an indicator to corporate governance advances, the influence of the presence of female non-executive directors and firm performance in Nigerian and South African listed companies is the primary focus of this study. This study stems from the target of SDG 5 that relates to economic and leadership empowerment and participation for women. The study’s main objective was to ascertain the impact of female non-executive directors on financial performance indicators, non-financial performance indicators and risk governance of Nigerian and South African firms.
The study design was a causal study, where secondary data was gathered from the top 40 companies listed on the Nigerian Exchange Group (NGX) and the Johannesburg Stock Exchange (JSE) Limited. The data used in the study was from 2010 to 2019. Both descriptive and inferential statistics were analysed to understand the data collected. The data were analysed for inferential statistics using the estimated generalised least square (EGLS) regression method and binary logistic regression.
From the findings of the study, female non-executive directors have a negative and significant impact on Tobin’s Q (financial performance), and a negative insignificant impact was observed with ROA, ROE and NPM (other financial performance indicators). A negative insignificant influence was discovered on employee satisfaction, customer satisfaction and innovation (non-financial performance). However, a positive significant impact on risk governance was inferred because women who serve as non-executive directors to the board may not affect performance directly and significantly, but they affect the risk management decisions in the organisation they serve, which in the long run affects sustainability and how these organisations perform. The study concluded that the presence of female non-executive directors on major boards of organisation has advanced from tokenism to critical mass.
Keywords: Board Diversity, Female non-executive directors, Financial performance, Nigeria, Non-financial performance, Risk governance, SDG 5, South Africa.