Women in Boards and Sustainability: Empirical evidence from Sri Lanka

Abstract

Women in boards is an emerging concept as a solution to break gender barriers across boardrooms. Thus, a comparative study has been conducted, focusing on examining the degree of women in boards and the level of sustainability based on the resource dependency theory, contingency theory, and agency theory. But there is a dearth of studies related to the women in board and sustainability in Sri Lanka. This study is carried out as a solution to the empirical gap and contextual gap. The archival data is gathered based on the audited annual set of financial statements based on the highest market capitalization for the period of 2016 to 2019 and the sample consists of 50 companies. In addition to secondary data, direct interviews were conducted for the sample taking an approach of the triangulation method. The gathered data was dropped down and analyzed by using descriptive statistics, regression, and independent sample T-test. The researcher has used sustainability as the dependent variable and the women directors on the board as an independent variable. The results indicate a significant positive relationship between women in boards and sustainability in Sri Lanka. Sri Lankan companies with the critical mass concept have a greater mean difference than companies without having female directors at least three. Furthermore, it also reveals that women’s power of managing different roles and gender stereotypes tend to increase sustainability performance in social, economic, and environmental spheres. The inclusion of female directors will be a pragmatic solution to gender diversity and to create an interest in sustainability which is proving to be an emerging trend in Sri Lanka. This study has proved that the inclusion of women’s voices in the board room adds more colour not only to survive in the corporate world but also to highlight and accentuate an organization by contributing more to society and the environment with growing performance.