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Women on Board and its Impact on Performance: Evidence from Microfinance Sector

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  • Rachana Vishwakarma

Abstract

The board of directors is the most imperative facet of corporate governance for any corporation as it is responsible for approving financial decisions, policy formulation as well as strategic decisions. Consequently, their composition is a solemn issue for the company at all times. Recent years have evidenced a steep amplify in the board diversity by enhancing the representation of women in corporate leadership. Diverse boards with individuals having different background perhaps tends to be more innovative and make better decisions. It could enhance the boards’ functioning, sharpen strength and bring a more diverse perspective. Meanwhile, the participation of women in decision-making is one of the most divergent factors which has been given a push in the form of law with enactment of The Company Act, 2013. Thus, this study mainly illustrates the relevance of women in microfinance and empirically examines the association between participation of women on board and in senior management with the performance of microfinance industry, using a sample of 50 Non-banking Financial Companies–Microfinance Institutions (NBFC–MFIs). It is evident that there is a positive and significant impact of women as board members with the financial performance and of senior management with social performance in context to Indian MFIs. Thus, it is suggested that MFIs should think about the femininity on board and in senior management to improve financial viability and social performance to achieve sustainable growth.

Suggested Citation

  • Rachana Vishwakarma, 2017. "Women on Board and its Impact on Performance: Evidence from Microfinance Sector," Indian Journal of Corporate Governance, , vol. 10(1), pages 58-73, June.
    • Handle: RePEc:sae:ijcgvn:v:10:y:2017:i:1:p:58-73
    DOI: 10.1177/0974686217701465
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    References listed on IDEAS

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    Cited by:

    1. Moez Bennouri & Anastasia Cozarenco & Samuel Anokye Nyarko, 2024. "Women on Boards and Performance Trade-offs in Social Enterprises: Insights from Microfinance," Journal of Business Ethics, Springer, vol. 190(1), pages 165-198, February.
    2. Md Aslam Mia & Lucia Dalla Pellegrina & Wai‐Yan Wong, 2022. "Female participation and financial performance of microfinance institutions: Evidence from transition economies," Development Policy Review, Overseas Development Institute, vol. 40(5), September.
    3. Niels Hermes & Marek Hudon, 2018. "Determinants Of The Performance Of Microfinance Institutions: A Systematic Review," Journal of Economic Surveys, Wiley Blackwell, vol. 32(5), pages 1483-1513, December.
    4. Beatrice Sarpong‐Danquah & Michael Adusei & Joseph Magnus Frimpong, 2023. "Effect of board gender diversity on the financial performance of microfinance institutions: Does judicial efficiency matter?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(2), pages 495-518, June.
    5. Md Aslam Mia, 2024. "Loyalty of rural microfinance borrowers: International evidence," Bulletin of Economic Research, Wiley Blackwell, vol. 76(1), pages 67-94, January.
    6. Dawood Ashraf & Muhammad Suhail Rizwan & Barbara L’Huillier, 2022. "Environmental, social, and governance integration: the case of microfinance institutions," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 837-891, March.
    7. Mia, Md Aslam, 2022. "Do women on boards affect employee benefits? Evidence from the global microfinance industry," Economics Letters, Elsevier, vol. 210(C).
    8. Hermes, Cornelis & Hudon, M., 2018. "Determinants of the Performance of Microfinance Institutions: A Systematic Review," Research Report 2018008, University of Groningen, Research Institute SOM (Systems, Organisations and Management).

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