The Effect of Top Management Gender Diversity on Perfomance of Firms Listed at Nairobi Securities Exchange

Abstract

In the recent past, there has been an increasing awareness that the absence of women in top management positions might have an impact on the overall performance of a firm. This has in turn led to growing concern for the need to understand whether diversifying such top management positions have an effect on organizational performance. It is against this backdrop that the overarching objective of this research was grounded. The purpose of this research was to assess the impact of top management gender diversity on organizational performance of firms listed at the Nairobi Securities Exchange. Through a cross-sectional descriptive research design, this study targeted all the 64 firms listed at the NSE and drew a non-probabilistic sample of only 45. The study utilized both primary and secondary data. Primary data was collected from the top management officers in the sampled firms through questionnaires. Secondary data regarding the financial performance of the sampled firms was sourced from NSE annual reports for the period 2012-2016. The collected data was analyzed using SPSS in which descriptive statistics such as mean and frequencies as well as inferential statistics such as multiple regression analysis were computed. The results of the study showed that that there is a positive relationship between firm performance and gender diversity, firm size, as well as, board independence. Enhancing gender diversity, firm size, and board independence generated a corresponding improvement in firm performance. In conclusion, the findings of this study revealed that increasing the number of women at top management positions is necessary in driving firm performance. As such, this study recommended the instituting better recruitment mechanisms by firms that facilitate a more gender diverse top management.