The aim of this paper is to examine the relationship between the number of women on corporate boards and company performance in FTSE 100 companies. In particular, to investigate if corporate boards with a higher percentage of female members outperform companies with less gender-diverse boards, measured by financial performance. The Davis Review requested by the United Kingdom government in 2011 on gender diversity of FTSE companies and the adaptation of the corporate governance code over the years indicate the importance of this topic. The increased percentage of female board members on FTSE 100 companies, from 12.5% in 2011 to 26.1% in 2015 (KPMG and Cranfield University, 2015), provides an opportunity in this research field. The analysis was conducted with a total of eighty-nine FTSE 100 companies. Financial data for the fiscal year 2015 was obtained from Thomson One database, whereas data associated with board directors was gathered from FAME. The findings show a tendency towards a positive impact of more gender-diverse boards on company performance. The evidence of the regression analysis suggests a statistically significant relationship between the percentage of women on FTSE 100 boards and Tobin’s Q, ROE and the logarithm of ROA. The female dummy variables, as alternatives to the percentage of female directors, show no relation to company performance in the regression analysis. The t-test reveals only a connection between gender diversity and ROE and Tobin’s Q. In summary, the evidence shows that FTSE 100 companies with a higher percentage of women on boards of directors achieve greater performance than companies with a lower percentage of female directors.
Keywords: boards of directors, women, performance, diversity, gender