Women on Board and Firm Value at Different Management Levels: The Moderating Role of Independent Directors

Abstract

The firm value deteriorated after the global financial crisis of 2007–2008. It is important to examine the relationship between women directors and firm values. This study investigates the moderating effect of independent directors on the relationship between women directors and firm value in listed banks in Pakistan. This study is based on half-yearly secondary data from 2016 to 2021. Panel data estimation techniques were used for the analysis. The study used Tobin’s Q as a dependent variable and women directors as independent variables. The size of the bank and age were employed as control variables, while independent directors were used as a moderators.

The results revealed a low proportion of independent and women directors on the boards of listed banks in Pakistan. Independent directors have a moderating impact on the relationship between women directors and firm value. The results also revealed that there is a positive relationship between the size of the bank, age of the bank, women directors, independent directors, and Tobin’s Q. The study concluded that banks in Pakistan do not strictly focus on considering the nomination of independent and women directors on boards, which exposes a risk of making financial decisions that are biased and decreasing firm value.