The role of board gender diversity in financial performance: role of sustainability, climate risk and internal control systems

The aim of the study is to explore the role of board gender diversity, sustainability, climate risk and internal control systems in financial performance. To achieve the study’s objectives, we employed data of 490 listed firms from 2000 to 2023 belonging to MENAT countries. The data is extracted from the data stream database. The ordinary least square (OLS) is used as a method of estimation for analysis, and the Generalized method of movement (GMM) is used for the robustness analysis. Our findings show that board gender diversity has a significant positive impact on corporate financial performance, indicating that the women in board composition make a more diverse board, which leads to help in the decision-making process. Moreover, our results show that the sustainability score has a significant positive impact on financial performance, indicating that the sustainability of the organization creates goodwill for the organization, which leads to a rise in financial performance. Moreover, climate risk decreases financial performance by increasing operational costs, disrupting supply chains, and impacting asset values. Similarly, the strong internal control in Turkish firms leads to a rise in financial performance through compliance with the code of the corporate governance mechanism and other laws enforced by the country’s legislation. Our results also show that the large board size has a positive relationship with financial performance. Our results also show that the experienced firm maintain their stability due to experience. Our study advocated the significant implications for government, investors, stakeholders and legislators.