The impact of female directors on firm performance has lacked
consistency in the previously conducted empirical studies, which may be
due to the endogeneity problem, or certain characteristics (i.e.
governance, industry, competition). This study examines the relationship
between female directors and firm performance by addressing those
problems. This study analyses all non-financial UK listed firms during
the period 2004-2012 and employs several econometric models. The
regression results indicate that there is little evidence that female
directors have a positive and strong relationship with firm performance.
But, further analysis reports that the UK’s small listed firms
experience a positive significant effect, because small firms do not
suffer from the problem of over-monitoring and they have more
flexibility in composing their boards of directors.