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JEL Classification System

M14

Abstract

Over the past decade, women’s participation in corporate boards has grown, yet their association with firm performance remains inconclusive, particularly in family-controlled firms where director independence may be constrained. This study decomposes female board representation by family affiliation and examines its association with the firm performance of publicly traded, nonfinancial family-controlled firms in the Philippines from 2003 to 2023. Using the generalized method of moments to address endogeneity concerns, we find that female family directors are positively associated with firm performance but only when measured using Tobin’s Q, a market-based valuation, suggesting that investors value stewardship. However, the lack of significant results for accounting-based measures—ROA and ROE—indicates that actual performance may not align with investor perception. These results suggest the potential relevance of contextual factors such as patriarchal biases and limited succession opportunities in Philippine family-controlled firms. Meanwhile, when testing the critical mass theory, we find that the relationship between female board participation and firm performance does not vary once female representation reaches a particular threshold, whether for female family or non-family directors.

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