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This study aims to examine the influence of board gender diversity on dividend policy and cash holdings in several emerging economies. This study also investigates the nonlinear impact of women on dividend policy and cash holdings and the differences between countries with one- and two-tier board systems.

The sample includes 103 firms listed in the Association of South East Asian Nations (ASEAN) countries of Indonesia, Malaysia, the Philippines and Thailand. The data represent all industries except the financial industry. The sample period is the 10 financial years from 2010 to 2019. This study analyzed unbalanced panel data with fixed effect specifications for baseline model analysis.

This study finds robust evidence indicating that women’s presence negatively influences dividends and positively influences cash holdings. The findings in the additional analysis are significant and show a nonlinear relationship, supporting the substitution hypothesis.

The findings of this paper certainly provided a valuable contribution as a useful empirical guide for policy decision-makers in developing countries, regulators and corporate decision-makers related to board gender diversity. Developed countries have implemented a minimum quota of women boards in the composition of the board of directors. However, there are still few developing countries that implement these policies. Women can reflect or show their values in corporate governance, such as being careful in making decisions and being conservative about risk. These guides policymakers in implementing a minimum quota of women in the composition of the board of directors.

This study contributes to the debate on the impact of gender diversity on dividends and cash holdings, especially in ASEAN emerging economies because there is a notable empirical gap relative to developed countries. Moreover, this study contributes to the necessary nuanced understanding of the substitution hypothesis in emerging economies. The results also support the explanation of critical mass theory to account for the nonlinear relationship between the number of women board members and dividends and cash holdings.

This study extends the literature on women directors and their impact on firm performance, focusing on developing countries and highlighting practices related to the role of gender diversity and inclusion in corporate governance, especially during a crisis like the COVID-19 pandemic.

We analyzed unbalanced panel data with five methods: OLS, fixed effect, random effect, two-stage least squares (2SLS) and the two-step system GMM. Using the Osiris database and annual reports from five Association of Southeast Asian Nations (ASEAN) countries covering 2010 to 2021, we analyzed 2,494 director-firm-year observations and 2,823 firm-year data on 305 firms.

We found a positive link between women on the board and firm performance. More women on the board enhance performance, particularly during crises, with a significant boost when three or more women are present. However, the positive impact weakens as the number of women surpasses this threshold.

This study’s finding can signal that women’s presence can bring better firm performance, although, in emerging economies, the growth of women’s presence on the board needs to be more inclusive. This condition becomes momentum for policymakers and practitioners or organizations to be more aware and count the women’s potential if they sit on the corporate board. These findings give implications and suggestions to the policymaker to make gender quotes at a high level, such as the board of directors under the critical mass theory, which is three women or one-third of the total board.

This research enhances understanding of how board gender diversity affects firm performance. Specifically, it examines the previously overlooked area of how diversity on boards impacts firms in developing countries facing crises.