Gender Diversity on Corporate Boards and Firm Performance: Evidence from Saudi Arabia

This study investigates the effect of board gender diversity on firm performance in Saudi Arabia, an emerging market undergoing significant economic and social reforms as part of Vision 2030. By analyzing a dataset of 180 firms, we evaluate key performance indicators—including Return on Assets (ROA), Return on Equity (ROE), Return on Invested Capital (ROIC), and Tobin’s Q—and identify a consistent positive relationship between the presence of women on boards and improved financial performance. Although only 20% of boards have female directors, our results suggest that gender diversity is a valuable governance mechanism that can enhance profitability, particularly in terms of market valuation. High foreign ownership and larger firm size both appear to create conditions under which the managerial and strategic benefits of a diverse board are more likely to translate into improved firm performance. The findings provide actionable insights for policymakers, corporate leaders, and investors, suggesting that initiatives to increase female representation on boards may enhance corporate governance and support broader economic diversification and modernization efforts within the region. These results are consistent across multiple methodological approaches and robustness checks, enhancing their credibility and practical relevance.