Background:  Diversity on corporate boards and strong audit committees are essential for good corporate governance, and promoting gender diversity, particularly increasing the number of women on boards, has been proven to enhance overall business performance.

Objective: This study aims to investigate whether the presence of women in the board of directors and audit committee affects the financial performance of Indonesian public companies listed on the Indonesia Stock Exchange (IDX). The study uses a purposive sampling method to select 670 companies from financial statements listed on IDX from 2019 to 2021, excluding the financial industry.

Research Method: The study employed multiple linear regression analysis with a fixed effect model and an ordinary least square (OLS) model to assess ROA and PER. Recognizing the presence of heteroskedasticity and autocorrelation issues, the regression was adjusted using Robust Standard Error for standardization.

Research Result: This study shows that having women on the board of directors positively influences Return on Assets (ROA) and negatively influences Price-to-Earnings Ratio (PER). Although the study did not find a significant influence of women on the audit committee, it suggests that the presence of women on boards of directors can potentially improve companies' financial performance.

Research Originality/Novelty: The authors emphasize that their study fills a gap in the literature by examining the impact of female presence in board of directors and audit committees on financial performance in Indonesian public companies.

Adams, R. B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics.

Adams, R. B., & Kirchmaier, T. (2016). Women on Boards in Finance and STEM Industries. American Economic Review, 106(5), 277–281. https://doi.org/10.1257/aer.p20161034

Aldamen, H., Hollindale, J., & Ziegelmayer, J. L. (2018). Female audit committee members and their influence on audit fees. Accounting & Finance, 58(1), 57–89. https://doi.org/10.1111/acfi.12248

Al-Jaifi, H. A. (2020). Board gender diversity and environmental, social and corporate governance performance: Evidence from ASEAN banks. Asia-Pacific Journal of Business Administration, 12(3/4), 269–281. https://doi.org/10.1108/APJBA-12-2018-0222

Apriani, F., & Zulfiani, D. (2020). Women’s Leadership in Southeast Asia: Examining the Authentic Leadership Implementation Potency. Policy & Governance Review, 4(2), 116–127. https://doi.org/10.30589/pgr.v4i2.275

Asare, S. K., Davidson, R. A., & Gramling, A. A. (2008). Internal Auditors’ Evaluation of Fraud Factors in Planning an Audit: The Importance of Audit Committee Quality and Management Incentives: Internal Auditors’ Evaluation of Fraud Factors in Planning an Audit. International Journal of Auditing, 12(3), 181–203. https://doi.org/10.1111/j.1099-1123.2008.00379.x

Ashari, S., & Krismiaji, K. (2020). Audit Committee Characteristics and Financial Performance: Indonesian Evidence. EQUITY, 22(2), 139–152. https://doi.org/10.34209/equ.v22i2.1326

Barrientos Báez, A., Báez-García, A., Flores Muñoz, F., & Josué, G.-B. (2018). Gender diversity, corporate governance and firm behavior: The challenge of emotional management. European Research on Management and Business Economics, 24. https://doi.org/10.1016/j.iedeen.2018.07.001

Bennouri, M., Chtioui, T., Nagati, H., & Nekhili, M. (2018). Female board directorship and firm performance: What really matters? Journal of Banking & Finance, 88, 267–291. https://doi.org/10.1016/j.jbankfin.2017.12.010

Booth-Bell, D., Jackson, P., & Carolina, S. (2021). GOVERNANCE THEORY AND BOARD DIVERSITY, WHERE DO THE RATIONALES FOR BOARD DIVERSITY AND GOVERNANCE THEORIES CONVERGE? 5(2).

Brammer, S., Millington, A., & Pavelin, S. (2009). Corporate Reputation and Women on the Board. British Journal of Management, 20(1), 17–29. https://doi.org/10.1111/j.1467-8551.2008.00600.x

Byron, K., & Post, C. (2016a). Women on Boards of Directors and Corporate Social Performance: A Meta-Analysis. Corporate Governance: An International Review, 24, n/a-n/a. https://doi.org/10.1111/corg.12165

Byron, K., & Post, C. (2016b). Women on Boards of Directors and Corporate Social Performance: A Meta-Analysis: Women Directors and Corporate Social Performance. Corporate Governance: An International Review, 24(4), 428–442. https://doi.org/10.1111/corg.12165

Campbell, K., & Minguez Vera, A. (2010). Female board appointments and firm valuation: Short and long-term effects. Journal of Management & Governance, 14(1), 37–59. https://doi.org/10.1007/s10997-009-9092-y

Carrera, N., & Van, D. K. B. (2021). Auditor ethics: Do experience and gender influence auditors’ moral awareness? Managerial Auditing Journal, 36(3), 463–484. https://doi.org/10.1108/MAJ-07-2020-2745

Chauhan, Y., & Dey, D. K. (2017a). Do female directors really add value in Indian firms? Journal of Multinational Financial Management, 42–43, 24–36. https://doi.org/10.1016/j.mulfin.2017.10.005

Chauhan, Y., & Dey, D. K. (2017b). Do female directors really add value in Indian firms? Journal of Multinational Financial Management, 42–43, 24–36. https://doi.org/10.1016/j.mulfin.2017.10.005

Chen, L. H., Gramlich, J., & Houser, K. A. (2019). The effects of board gender diversity on a firm’s risk strategies. Accounting & Finance, 59(2), 991–1031. https://doi.org/10.1111/acfi.12283

Chijoke-Mgbame, A. M., Boateng, A., & Mgbame, C. O. (2020). Board gender diversity, audit committee and financial performance: Evidence from Nigeria. Accounting Forum, 44(3), 262–286. https://doi.org/10.1080/01559982.2020.1766280

Dadanlar, H. H., & Abebe, M. A. (2020). Female CEO leadership and the likelihood of corporate diversity misconduct: Evidence from S&P 500 firms. Journal of Business Research, 118, 398–405. https://doi.org/10.1016/j.jbusres.2020.07.011

Daily, C. M., Certo, S. T., & Dalton, D. R. (1999). A decade of corporate women: Some progress in the boardroom,none in the executive suite. Strategic Management Journal, 20(1), 93–100. https://doi.org/10.1002/(SICI)1097-0266(199901)20:1<93::AID-SMJ18>3.0.CO;2-7

Dang, R., Bender, A.-F., & Scotto, M.-J. (2014). Women On French Corporate Board Of Directors: How Do They Differ From Their Male Counterparts? Journal of Applied Business Research (JABR), 30(2), 489. https://doi.org/10.19030/jabr.v30i2.8420

Đặng, R., Houanti, L., Reddy, K., & Simioni, M. (2020). Does board gender diversity influence firm profitability? A control function approach. Economic Modelling, 90, 168–181. https://doi.org/10.1016/j.econmod.2020.05.009

Darmadi, S. (2013). Do women in top management affect firm performance? Evidence from Indonesia. Corporate Governance: The International Journal of Business in Society, 13(3), 288–304. https://doi.org/10.1108/CG-12-2010-0096

Dearing, H. (2016). Gender equality in the division of work: How to assess European leave policies regarding their compliance with an ideal leave model. Journal of European Social Policy, 26(3), 234–247. https://doi.org/10.1177/0958928716642951

Defond, M. L., Hann, R. N., & Hu, X. (2005). Does the Market Value Financial Expertise on Audit Committees of Boards of Directors? Journal of Accounting Research, 43(2), 153–193. https://doi.org/10.1111/j.1475-679x.2005.00166.x

Dhaliwal, D., Naiker, V., & Navissi, F. (2010). The Association Between Accruals Quality and the Characteristics of Accounting Experts and Mix of Expertise on Audit Committees*: Accruals Quality and Financial Expertise. Contemporary Accounting Research, 27(3), 787–827. https://doi.org/10.1111/j.1911-3846.2010.01027.x

Dunn, P. (2012). Breaking the boardroom gender barrier: The human capital of female corporate directors. Journal of Management & Governance, 16(4), 557–570. https://doi.org/10.1007/s10997-010-9161-2

Fama, E. F., & Jensen, M. C. (1998). Agency Problems and Residual Claims. THE JOURNAL OF LAW AND ECONOMICS.

Fariha, R., Hossain, Md. M., & Ghosh, R. (2021). Board characteristics, audit committee attributes and firm performance: Empirical evidence from emerging economy. Asian Journal of Accounting Research, 7(1), 84–96. https://doi.org/10.1108/AJAR-11-2020-0115

Fouad, S. H. L., Fouad, N. A., Li, X., & Carvalho, J. (2022). Global perspectives on gender diversity and business performance. Gender in Management: An International Journal, 38(3), 305–321. https://doi.org/10.1108/GM-02-2022-0040

Galletta, S., Mazzù, S., Naciti, V., & Vermiglio, C. (2022). Gender diversity and sustainability performance in the banking industry. Corporate Social Responsibility and Environmental Management, 29(1), 161–174. https://doi.org/10.1002/csr.2191

Gavious, I., Segev, E., & Yosef, R. (2012). Female directors and earnings management in high‐technology firms. Pacific Accounting Review, 24(1), 4–32. https://doi.org/10.1108/01140581211221533

Gill, S. (2010). Is gender inclusivity an answer to ethical issues in business? An Indian stance. Gender in Management: An International Journal, 25(1), 37–63. https://doi.org/10.1108/17542411011019922

Hakovirta, M., Denuwara, N., Bharathi, S., Topping, P., & Eloranta, J. (2020). The importance of diversity on boards of directors’ effectiveness and its impact on innovativeness in the bioeconomy. Humanities and Social Sciences Communications, 7(1), Article 1. https://doi.org/10.1057/s41599-020-00605-9

Henretta, K. A. W. and D. A. (2018, January 30). Why the Influence of Women on Boards Still Lags. MIT Sloan Management Review. https://sloanreview.mit.edu/article/why-the-influence-of-women-on-boards-still-lags/

ILO (2020), An employers guide on managing your workplace during COVID-19. International Labour Organization. (2020). https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---act_emp/documents/publication/wcms_740212.pdf

ICG (2018). Indonesia Corporate Governance Manual 2nd Edition. https://www.abnrlaw.com/files/document/Indonesia_CG+Manual_2nd_Edition.pdf

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial Behavior, agency costs and ownership structure. North-Holland.

Kabir, A., Ikra, S. S., Saona, P., & Azad, Md. A. K. (2023). Board gender diversity and firm performance: New evidence from cultural diversity in the boardroom. LBS Journal of Management & Research, ahead-of-print(ahead-of-print). https://doi.org/10.1108/LBSJMR-06-2022-0022

Kanadlı, S. B., Torchia, M., & Gabaldon, P. (2018). Increasing women’s contribution on board decision making: The importance of chairperson leadership efficacy and board openness. European Management Journal, 36(1), 91–104. https://doi.org/10.1016/j.emj.2017.03.006

Kaur, A., & Singh, B. (2017). Construing Reputation from Gender Diversity on Boards: Indian Evidence. Paradigm, 21(2), 111–125. https://doi.org/10.1177/0971890717736195

Kennedy, J. A., Kray, L. J., & Ku, G. (2017). A social-cognitive approach to understanding gender differences in negotiator ethics: The role of moral identity. Organizational Behavior and Human Decision Processes, 138, 28–44. https://doi.org/10.1016/j.obhdp.2016.11.003

Khemakhem, H., Maalej, M., & Fontaine, R. (2022). Inside the black box: How can gender diversity make a difference in the boardroom? Equality, Diversity and Inclusion: An International Journal, 41(6), 889–906. https://doi.org/10.1108/EDI-07-2021-0178

Kim, H., Kwak, B., Lim, Y., & Yu, J. (2017). Audit committee accounting expertise, CEO power, and audit pricing. Asia-Pacific Journal of Accounting & Economics, 24(3–4), 421–439. https://doi.org/10.1080/16081625.2015.1105753

Kou, G., Xu, Y., Peng, Y., Shen, F., Chen, Y., Chang, K., & Kou, S. (2021). Bankruptcy prediction for SMEs using transactional data and two-stage multiobjective feature selection. Decision Support Systems, 140, 113429. https://doi.org/10.1016/j.dss.2020.113429

Krishnan, G. V., & Visvanathan, G. (2008). Does the SOX Definition of an Accounting Expert Matter? The Association between Audit Committee Directors’ Accounting Expertise and Accounting Conservatism. Contemporary Accounting Research, 25(3), 827–858. https://doi.org/10.1506/car.25.3.7

Lawson, M., Martin, A., Huda, I., & Matz, S. (2022). Hiring women into senior leadership positions is associated with a reduction in gender stereotypes in organizational language. Proceedings of the National Academy of Sciences of the United States of America, 119. https://doi.org/10.1073/pnas.2026443119

Liem, P. F., & Basana, S. R. (2012). Price Earnings Ratio and Stock Return Analysis (Evidence from Liquidity 45 Stocks Listed in Indonesia Stock Exchange). Jurnal Manajemen Dan Kewirausahaan, 14(1), 7–12. https://doi.org/10.9744/jmk.14.1.7-12

Martiana, T. (2018). Prof Tri Martiana- indonesia -VIII.pdf.. Retrieved April 8, 2023, from https://repository.unair.ac.id/81422/1/Prof%20Tri%20Martiana-%20indonesia%20-VIII.pdf

McKinsey & Co. (2022).“Women in the Workplace 2022.” McKinsey & Company, 18 Oct. 2022,www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace#/.

Mensah, E., & Onumah, J. M. (2023). Women on boards, firm earnings management (EM) and performance nexus: Does gender diversity moderate the EM–performance relationship? Corporate Governance: The International Journal of Business in Society, ahead-of-print(ahead-of-print). https://doi.org/10.1108/CG-06-2022-0262

Miller, T., & del Carmen Triana, M. (2009). Demographic Diversity in the Boardroom: Mediators of the Board Diversity-Firm Performance Relationship. Journal of Management Studies, 46(5), 755–786. https://doi.org/10.1111/j.1467-6486.2009.00839.x

Mnif, S. Y., & Cherif, I. (2020). Female audit committee directorship and audit fees. Managerial Auditing Journal, 35(3), 398–428. https://doi.org/10.1108/MAJ-12-2018-2121

Musallam, S. R. M. (2020). Effects of board characteristics, audit committee and risk management on corporate performance: Evidence from Palestinian listed companies. International Journal of Islamic and Middle Eastern Finance and Management, 13(4), 691–706. https://doi.org/10.1108/IMEFM-12-2017-0347

Obeidat, M. I., & Darkal, N. M. A. (2018). Accounting versus Economic Based Measures of Performance and the Share Market Value: The Evidence of the Industrial Listed Firms at Abu Dhabi Stock Exchange. 15.

Oceanio, V. D. (2022). Maternity Leave and Gender Equality: Comparative Studies of Indonesia, Malaysia, and Thailand. Populasi, 30(2), Article 2. https://doi.org/10.22146/jp.80183

Oradi, J., & Izadi, J. (2019). Audit committee gender diversity and financial reporting: Evidence from restatements. Managerial Auditing Journal, 35(1), 67–92. https://doi.org/10.1108/MAJ-10-2018-2048

Post, C., Lokshin, B., & Boone, C. (2021, April 6). Research: Adding Women to the C-Suite Changes How Companies Think. Harvard Business Review. https://hbr.org/2021/04/research-adding-women-to-the-c-suite-changes-how-companies-think

Reddy, S., & Jadhav, A. M. (2019). Gender diversity in boardrooms – A literature review. Cogent Economics & Finance, 7(1), 1644703. https://doi.org/10.1080/23322039.2019.1644703

Ridgeway, C. L. (2001). Small-group Interaction and Gender. In N. J. Smelser & P. B. Baltes (Eds.), International Encyclopedia of the Social & Behavioral Sciences (pp. 14185–14189). Pergamon. https://doi.org/10.1016/B0-08-043076-7/03999-1

Ross, S. A. (1973). The Economic Theory of Agency: The Principal’s Problem. The American Economic Review, 63(2), 134–139.

Sarajoti, P., Chatjuthamard, P., Papangkorn, S., Treepongkaruna, S., Sarajoti, P., Chatjuthamard, P., Papangkorn, S., & Treepongkaruna, S. (2022). CSR and Female Directors: A Review and Future Research Agenda. IntechOpen. https://doi.org/10.5772/intechopen.105112

Setiawan, D., Phua, L. K., Chee, H. K., & Trinugroho, I. (2020). The effect of audit committee characteristics on earnings management: The case of Indonesia.

Simionescu, L. N., Gherghina, Ş. C., Tawil, H., & Sheikha, Z. (2021). Does board gender diversity affect firm performance? Empirical evidence from Standard & Poor’s 500 Information Technology Sector. Financial Innovation, 7(1), 52. https://doi.org/10.1186/s40854-021-00265-x

Singh, V., & Vinnicombe, S. (2004). Why So Few Women Directors in Top UK Boardrooms? Evidence and Theoretical Explanations. Corporate Governance, 12(4), 479–488. https://doi.org/10.1111/j.1467-8683.2004.00388.x

Spence, M. (1973). Job Market Signaling. The Quarterly Journal of Economics, 87(3), 355. https://doi.org/10.2307/1882010

Triana & Asri, M. (2017). THE IMPACT OF FEMALE DIRECTORS ON FIRM PERFORMANCE: EVIDENCE FROM INDONESIA. Journal of Indonesian Economy and Business, 31(1), 19. https://doi.org/10.22146/jieb.21994

Tunyi, A. A., Areneke, G., Tob-Ogu, A., & Khalid, S. (2023). Doing more with more: Women on the board and firm employment. Journal of Business Research, 154, 113385. https://doi.org/10.1016/j.jbusres.2022.113385

Wahid, A. S. (2019). The Effects and the Mechanisms of Board Gender Diversity: Evidence from Financial Manipulation. Journal of Business Ethics, 159(3), 705–725. https://doi.org/10.1007/s10551-018-3785-6

World Economic Forum . Gender Gap Report (2022, August 1). World economic forum. https://www3.weforum.org/docs/WEF_GGGR_2022.pdf