VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY TRAN THI THANH HUONG RELATIONSHIP BETWEEN WOMEN LEADERSHIP AND COMPANY’S PERFORMANCE: EVIDENCE FROM VIETNAMESE LISTED COMPANIES MASTER'S THESIS VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY TRAN THI THANH HUONG RELATIONSHIP BETWEEN WOMEN LEADERSHIP AND COMPANY’S PERFORMANCE: EVIDENCE FROM VIETNAMESE LISTED COMPANIES MAJOR: BUSINESS ADMINISTRATION CODE: 8340101.01 RESEARCH SUPERVISORS: ASSOC. TRAN THI THANH TU PRO. TOHRU INOUE Hanoi, 2022 COMMITMENT I have read and understood the plagiarism violations. I pledge with personal honor that this research result is my own and does not violate the Regulation on prevention of plagiarism in academic and scientific research activities at VNU Vietnam Japan University (Issued together with Decision No 700/QD-ĐHVN dated 30/9/2021 by the Rector of Vietnam Japan University) Author of thesis DEDICATION I dedicate this thesis as a token of love to my beloved parents, Mr.
Tran Van Chien and Mrs. Tran Thi Kim Ngan, who are always been the biggest support and encouragement to me. Their unconditional love and motivation made me able to go out of my homeland with confidence and courage to do something meaningful in my life. Their strong and gentle soul taught me to learn from the challenges and transform my weaknesses into my strengths.
ACKNOWLEDGEMENT The preparation of this humble work encompasses the immense and unlimited help of innumerable people. I express my deepest and most sincere gratitude to my two respectable supervisors Prof. Tohru Inoue and Assoc. Tran Thi Thanh Tu for their prompt and necessary guidance, supervision, expert suggestion, and encouragement which have helped me to tide over the hardship encountered during the study.
For me, it was a unique experience to apply what I have learned so far from the perspective of a global young scholar. This master thesis was a great chance for learning and professional development. My special thanks go to them for keeping patient with me and sending me countless support. Next, I would love to express my deep sense of gratitude to all revered VJU and YNU professors including Hiroshi Morita sensei, Motonari Tanabu sensei, Kodo Yokozawa sensei, Yoshifumi Hino sensei, Kishi Naoko sensei, Maeyama Nobuyuki sensei, Peijun Guo sensei, Kaori Suzuki sensei, Yunyue Yang sensei, Hisashi Kurata sensei, Sadami Suzuki sensei, Kumiko Kondo sensei, Noriko Nagamine sensei, Prof.
Nham Phong Tuan, Prof. Pham Thi Lien, Prof. Nguyen Thi Phuong Mai, Prof. Mai Anh, Prof.
Nguyen Thi Oanh and Prof. Do Xuan Truong for providing me with this opportunity to associate myself with them for my study and for providing me with a wide range of valuable guidance and affable treatment given to me. They helped me in learning business-related procedures and activities, which helped me to add a feather to my cap. I wish to send my thank you words to the officials and staff members including Nguyen Thi Huong san, Kaori Yagi san, Mina Maeda san, Akiko Sakakibara san, and other members who rendered their unlimited help during my study.
I would like to extend my deep gratitude to my family and my friends for their support in carrying out this work successfully. Thank you all once again. ABSTRACT The dissertation studies the relationship between women’s leadership and a company’s performance with evidence from Vietnamese-listed companies. Women leadership is assessed by the percentage of women on the board of directors and their number.
Theories suggested that gender diversity in the boardroom improves strategic decision- making, creativity, innovations, and hence financial success. And boards with a number of women members large enough may modify the overall working style, hence altering the boardroom's dynamics. In general, this research assumes that the proportion of women on the board of directors is positively correlated with the company’s performance which is measured as return on assets (ROA), return on equity (ROE), and Tobin’s Q. And the board of directors with 3 or more women directors will positively influence the company’s performance.
A cross-sectional empirical analysis investigates the 618 Vietnamese companies listed on Hochiminh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) in the year 2019. The dissertation demonstrated that there exists a significant positive relationship between the proportion of women on the Board of Directors and the company’s performance. And the Board of Directors with at least three women positively influences the company’s performance. This empirical analysis helps make sense of inconclusive earlier studies and provides policymakers and company managers with theoretical and practical implications.
Keywords: Women leadership, Company’s performance, Board of directors TABLE OF CONTENTS CHAPTER 1.7 CHAPTER 2: LITERATURE REVIEW…….3 Impact of women leadership on company’s performance. The case of Vietnam. Research Gap and Contribution .19 CHAPTER 3: RESEARCH METHODOLOGY AND DESIGN. Models and Hypotheses .26 CHAPTER 4: FINDINGS AND DISCUSSIONS.3 The relationship between the proportion of women on the BOD and company’s performance.
The least women director size that has an impact on company’s performance .36 CHAPTER 5: CONCLUSIONS AND POLICY IMPLICATIONS .3 Limitations and suggestions for future research. 48 LIST OF TABLES Table 3. Dependent variables – Company’s performance…………………………. Independent variables – Women in the boardroom…………….
Gender of BOD members…………………………………………………. Top three industries with highest percentage of women on BOD…………29 Table 4. Descriptive statistics of variables in the models………………………….5 Regression Model result for the Hypothesis 1……………………………. Regression Model result for the Hypothesis 2…………………………….37 i LIST OF ABBREVIATIONS BOD: Board of Directors CEO: Chief Executive Officer GSO: General Statistics Office of Viet Nam HOSE: Hochiminh Stock Exchange HNX: Hanoi Stock Exchange ILO: International Labour Organization ROE: Return on Equity ROA: Return on Assets ii CHAPTER 1.
INTRODUCTION This chapter presents the issue to be explored in this thesis by demonstrating the research motivation. In addition, this chapter describes the study aims, research questions, and research contributions.1 Research background Women in management is a prominent issue today and their involvement in executive roles has expanded within the previous decade. Nowadays, the world of business is valuing the efforts and potential of women to propel a company’s performance. According to the report “Women in the boardroom: A global perspective” (Deloitte, 20221) about gender diversity trends in 51 countries around the world, some countries already have laws regulating the proportion of women in the board of directors.
In 2005, Norway became the first country in the world to enact gender quota legislation for public limited companies, requiring 40% male and female representation on the board. That rate in Spain has been 40% by the end of 2022, Netherlands 33% since 2022, France 40% since 2017, Belgium one-third since 2011 and India has mandated at least one woman on corporate boards since 2012. In several European nations, such as Norway, Sweden, and France, the implementation of gender quotas or laxer regulations has facilitated a larger presence of women in higher positions and boardrooms, in particular (European Women on Boards, 2016)2. STOXX Europe 600 businesses had 1.5 women on their boards in 2011 and 2.8 in 2015 and in five years, women's board representation almost doubled from 13.9% to 25%, but board size remained steady (European Women on Boards, 2016)2.
The percentage of women on the board of 10,493 analyzed companies from 72 countries has increased from 16. The presence of women in top managerial positions including board chairs, CEOs, and CFOs is 1 Global, D. Women in the boardroom: A global perspective. 2 European Women on Boards (EWoB’s).
Gender Diversity on European Boards – Realizing Europe’s Potential: Progress and Challenges. Retrieved from https://www.at/sites/default/files/EWoB-quant- report-WEB-spreads.pdf 1 improved from 5.7% over three years from 2018 to 2021, respectively (Deloitte, 2021)1. In East Asian nations, including Vietnam, women's roles in society have been misunderstood for generations (Anh and Trang, 20193). People in these nations have preconceived beliefs of gender bias, believing that women's responsibilities are restricted to caring for their families.
Recently, however, the status of women in households and society has been significantly enhanced (Anh & Trang, 2019)3. Women have entered as many occupations as males, notably in the commercial sector. In Vietnam, the number of women accounting for 50.2% of the population and 48.3% of the labour force (GSO, 2019)4 is considered an important driving force for economic development. According to the "National Strategy on Gender Equality for the 2021 - 2030 period"5, the proportion of female corporate directors and owners is projected to reach at least 27% by 2025 and 30% by 2030.
Women run ¼ of small and medium-sized enterprises, creating jobs for more than 1 million employees (Mekong Business Initiative, 2016) 6. Women-leaded enterprises not only provide jobs but also actively contribute to GDP through their business activities such as import-export, manufacturing, outsourcing, logistics and so on. Although Vietnam has made significant progress in achieving gender equality, contemporary women continue to face many obstacles in all fields, particularly in the politics and economics fields. Some empirical studies indicate that in contrast to men, women lack the requisite qualities and talents for success.
Eagly and Johannesen- Schneider (2001)7 claimed that “they tend to associate themselves with friendliness and sharing mind (best known as the social service-oriented model), rather than 3 Anh, H. The impact of board gender diversity on company’s performance: Evidence from Vietnamese listed firms. Dalat University Journal of Science, 9(1), 31-48. 4 GENERAL STATISTICS OFFICE.
Completed results of the 2019 Viet Nam population and housing census. Retrieved from https://www.vn/en/data-and-statistics/2020/11/completed-results-of-the-2019- viet-nam-population-and-housing-census/ 5 LuatVietnam. The Resolution No. 28/NQ-CP on promulgation of the National Strategy on Gender Equality in the period of 2021 – 2030.
Retrieved from https://english.vn/resolution-no-28-nq-cp- dated-march-03-2021-of-the-government-on-promulgation-of-the-national-strategy-on-gender-equality-in-the- period-of-2021-203-199301-Doc1.html 6 Mekong Business Initiative. DOANH NGHIỆP NHỎ VÀ VỪA DO PHỤ NỮ LÀM CHỦ TẠI VIỆT NAM: THỰC TRẠNG VÀ GIẢI PHÁP (WOMEN-Owned SMEs in VIETNAM: SITUATION AND SOLUTIONS). The leadership styles of women and men. Journal of social issues, 57(4), 781-797.
2 rewardingness (best known as the performance-oriented model), and unfortunately, the latter is believed to be an essential trait of a genuine commander”. Additionally, Kanter (1977)8 said onlookers tend to misrepresent the image of women executives by equating their image with femininity as opposed to the distinctive attributes of a leader. The link between women's leadership and business success is based on two strategic management theories, including the agency theory and the resource dependence theory. However, extant empirical investigations have inconclusive outcomes.
Some research shows a link between women in the boardroom and corporate success while few studies have shown board gender diversity to hurt business success and other studies could not conclude a significant result. Taking into account recent trends in Vietnamese corporate boards and the inconclusive empirical findings, this calls for a deeper understanding of women leadership and its influence on a company’s performance to provide excellent corporate governance and more effective boards. Therefore, the objective of this study is to empirically evaluate the relationship between women leadership and company performance of Vietnamese enterprises by answering the following research question: How do women on the board of directors affect the performance of companies? This dissertation aims to show that organizations with a high proportion of women in management roles have superior financial performance compared to other companies. The topic will study how the presence of women directors in the boardroom affects a company’s performance to draw recommendations to provide better improvement in the company.
To evaluate the relationship between gender diversity within corporate boards and corporate performance in Vietnam, the author analyzed 618 listed companies including 296 companies on Hanoi Stock Exchange (HNX) and 322 companies on Hochiminh Stock Exchange (HOSE). Some effects of proportions on group life. In The gender gap in psychotherapy (pp. Springer, Boston, MA.
Theoretical necessity In recent years, academics have investigated the link between variability in corporate governance and firm success, obtaining contradictory conclusions. Aside from that, it is generally acknowledged that a company is a mirror of top management. Hence, the traits and operations of senior management is a key influence on defining corporate outcomes. The research topic of diversity among the director boards is heavily debated, and the researchers have produced varying findings.