Abstract
This study aims to obtain empirical evidence on the effect of the sex diversity of the board of commissioners (SDBOC) on firm performance (FP). In addition, this study examines the role of the ethnic background of the president commissioner (ETC) as a moderating variable that strengthens the influence of the sex diversity of the board of commissioners (SDBOC) on firm performance (FP). The sample consists of manufacturing companies, registered as public companies in Indonesia between 2017 and 2021, resulting in 783 observations. The data analysis includes several multivariate regression techniques consisting of ordinary least squares (OLS), fixed effects (FE), and the Heckman selection model for data robustness and hypothesis testing. The results showed that the sex diversity of the board of commissioners increased firm performance, as measured by Tobin’s Q (TQ), but it had no significant effect on the market to book value (MBV). Furthermore, the ethnic background of the president commissioner strengthened the influence of the sex diversity of the board of commissioners on firm performance, as measured by TQ and MBV. The results support the theories used, namely agency theory, resource dependence theory, and upper echelon theory. Shareholders can use the result of this study to highlight certain aspects during the appointment of the board of commissioners, in terms of their gender diversity and the ethnic background of the president commissioner. Meanwhile, the required number of women on the board of commissioners, to improve board decisions, equates to two. This is supported by the critical mass theory.
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Acknowledgment
The authors received no direct funding for this research.
Author contributions
Conceptualization, N.E. and N.S.; methodology, N.E. and N.S.; data curation N.E., and N.S.; validation, N.E.; formal analysis, N.E. and N.S.; writing—original draft preparation, N.E.; writing—review and editing, N.S.; supervision, N.S.; project administration, N.S.; All authors have read and agreed to the published version of the manuscript.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Data availability statement
Data used in the present study will be available on request, from the corresponding author.
Additional information
Notes on contributors
Nanik Ermawati
Nanik Ermawati is a PhD student in Accounting, Faculty of Economics and Business, Airlangga University. He is also active as a lecturer at the Bachelor of Accounting Faculty of Economics and Business, Muria Kudus University. Her research focus is management accounting, corporate governance.
Noorlailie Soewarno
Noorlailie Soewarno SE., MBA., Ak., is an Professor of accounting at Faculty of Economics and Business, Universitas Airlangga, Indonesia. She is an active and professional researcher and has published numerous articles in reputable journals. Her focus includes management accounting, strategic management, corporate social responsibility, and green accounting.