Impact of Gender Diversity Boards on Financial Health SMEs

This chapter analyzes the impact of gender diversity on the financial health of small- and medium-sized enterprises (SMEs). Financial statements of 1178 joint-stock companies, specifically 351 medium-sized enterprises and 827 small enterprises, were analyzed during the COVID-19 pandemic for 2020 and the prior year. Several logistic regression models were developed separately for small- and medium-sized enterprises. These models are described by pseudo R-squared, Akaike information criterion, Bayesian information criterion, variance inflation factor, and area under the curve. The results were cross-validated by stratified tenfold cross-validation, and they show a negative relationship and also a U-shape between gender diversity boards and the probability of SME bankruptcy. Older companies, companies with lower levels of debt, companies with larger numbers of employees, and companies with smaller volumes of tangible assets also have a lower probability of bankruptcy. Based on the results, it can be assumed that the gender diversity board by shareholders also makes sense for SMEs. Moreover, in SMEs, board members have a much stronger position. Thus, there is a significant assumption that the influence of women on the board of such companies could be more significant than in the case of large companies.