Board Gender Diversity and Firm Financial Performance: Exploring the role of Directors’ Family Affiliations

Recent studies acknowledge that the contribution of female directors at the board may not be uniform but instead varies depending on their individual characteristics and board context. In this study we focus on a pivotal yet insufficiently explored facet of female directors – their affiliation with the business owning family – and assess its implications for family firm financial performance. Drawing upon the ‘doing gender’ perspective, we contend that family-affiliation creates a formidable barrier for female family directors, impeding their legitimacy within the board and ultimately reducing their contribution to firm financial performance. Our empirical analysis spanning 127 Italian listed family firms from 2003 to 2019 reveals that family female directors exhibit a less positive influence on firm financial performance than their non-family counterparts. We further show that this effect is contingent on the presence of male family members on the board – being positive when their presence is low but turning negative when their presence is high. In essence, our study represents an important advancement in understanding the intricate and contingent effects of female directors within a distinct context of family firms.