Corporate governance in emerging markets is often shaped by ownership concentration, which makes female board representation crucial. However, evidence of the role of women on boards remains limited and fragmented. This study investigates the role of female board members by using indicators of their representation, education, age, and nationality to examine how they influence corporate governance. Drawing on agency and resource dependence theories, this study examines the role of directors and commissioners in capturing the unique two-tier board systems in developing countries. Employing fixed effects and dynamic GMM, this study finds that board diversity improves governance quality, with the impact becoming more pronounced when it reaches a critical mass of 30 %. Younger, more highly educated, and foreign females on boards show differential interaction effects on boards of directors and commissioners, underscoring the importance of the quality of gender diversity tailored to their positions. This robust study advances the theory in a two-tier governance structure while offering practical guidance for regulators and firms to encourage meaningful female participation.
Arif Budi Satrio (Wed,) studied this question.