Board gender diversity and corporate performance in Cameroon

Abstract

This thesis examines the relationship between gender diversity and its impact on company performance in Cameroon using Critical Mass Theory as a framework. The study used data from 20 randomly selected companies with a minimum turnover of USD 20-million, between 2008 and 2012, and interviewed 15 female board members. Financial performance was measured using financial ratios, return on assets and return on equity, while non-financial performance was measured in terms of corporate social performance. Combining ordinary least squares and qualitative narrative approach, the findings showed that diversity affects company performance in Cameroon. Companies with women on their boards have higher financial and social returns compared to those without. The study found that critical mass exists somewhere between the 10% and 40% range. Evidently, the study established that the presence of a single woman on a board of directors can make a significant difference in the Cameroonian business environment. The results add to the literature on corporate governance in three ways; (i) it confirms that board gender diversity positively affects how companies perform, with a recommended critical mass of 20% rather than the widely held benchmark of 30%. It also puts forward the idea that critical mass is not a fixed point, but varies in time, place and even industry. (ii) The use of Cameroon (an under-studied country) as the sample for this study executes a unique contribution. It is also a major economic player in the Central African sub-region. (iii) The inclusion of non-financial performance (corporate social performance) in the assessment of company performance is unique. The results show that companies can successfully combine corporate financial performance and corporate social performance if they just set up the correct strategy. Company performance is no longer only assessed in terms of financial performance but also in terms of non-financial or social performance.