Dual-Board Gender Diversity and Firm Performance: Evidence from Indonesia’s Financial Sector with Macroeconomic as a Moderator

Abstract

This study examines the influence of board gender diversity on the financial performance of Indonesian financial institutions, with a particular focus on the distinct roles of female directors and female commissioners. Drawing on panel data from 2018 to 2023, covering both banking and non- banking sectors, and employing random-effect regression models in Stata, the analysis further incorporates macroeconomic factors gross domestic product (GDP) and interest rates—as potential moderators. The results reveal heterogeneous effects across board positions and industry segments. Female directors exert a significant positive impact on return on equity (ROE) in the banking sector, underscoring their strategic contributions in highly regulated and risk-intensive environments. In contrast, their influence in non-banking firms is not significant, where male directors continue to dominate performance outcomes. Female commissioners display a consistently positive effect in the banking sector, even after firm-level controls, highlighting their substantive monitoring role. However, in non-banking firms, their initial significance diminishes once controls and moderating factors are introduced, suggesting a more symbolic presence. Macroeconomic conditions further differentiate the outcomes: GDP shows no moderating effect, while interest rates are decisive-positively influencing bank performance but negatively affecting non-banks. These findings demonstrate that the effectiveness of gender diversity is not universal but contingent upon board function, industry context, and external economic conditions. The study contributes to agency, resource dependence, and contingency theories by providing evidence from an emerging market context. Practically, the findings suggest the need for sector-specific policies to strengthen female participation, particularly in banking, and encourage firms to empower women in strategic decision-making roles.