Board Gender Diversity and Financial Distress Risk: Evidence from Bangladesh

Abstract

The study aims to find out whether board gender diversity matters in the corporate board and whether it can be valuable for predicting financial distress risk. The data set consists of 370 firm-year observations gathered from DSE-listed manufacturing firms during 2012-2019. The mean value shows the ratio of female directors in Bangladeshi firms is greater than in India but lower compared to other developed countries. Besides, the presence of female directors is greater in FD (financially distressed) firms than in non-FDs during the study period. Logistic regression finds a positive but statistically insignificant influence of BGD on the likelihood of FD. This finding proves the argument placed by other authors about female directors being the victims of tokenism specifically in family firms. Practically, the study will provide exclusive inputs for ensuring gender equality in corporate top management positions and facilitate reforming governance guidelines specific to country and culture relevant