Female outside directors and organisational performance: Exploring corporate governance, leadership and diversity theories

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Abstract

Thought-out philosophies on how corporate governance and organisational performance interact have been shared in research. Theories form the foundation on which concepts are built, giving life to the ideas they aim to convey (Borsboom et al., 2021). This paper uses a review mechanism to consider the theories related to the research on female outside directors and organisational performance. The theories are considered under three headings — corporate governance, leadership or management, and diversity theories. As all the theories discussed have a relationship with the research on female outside directors, the stakeholder theory and the diversity theory play the most significant role in explaining the relationship present with female outside directors on corporate boards and their impact on firm performance (Stoelhorst & Vishwanathan, 2024; Tuấn, 2021). The synergy of these theories advances knowledge in corporate governance research by demonstrating that gender diversity on boards is essential not just for fairness but as a strategic imperative that enhances overall organisational success, sound governance, global economic growth, and innovation. It was concluded that the assignment of the board of directors representing the principal, to satisfy the shareholders, as well as other stakeholders, is enhanced by diversity theory and improves the performance of corporate organisations.

Keywords: Corporate Governance Theory, Diversity Theory, Female Outside Directors, Leadership Theory, Management Theory

Authors’ individual contribution: Conceptualization — T.A., M.A., and D.C.; Validation — T.A., M.A., and D.C.; Formal Analysis — T.A.; Investigation — T.A., Resources — T.A., M.A., and D.C.; Data Curation — T.A.; Writing — Original Draft — T.A.; Writing — Review & Editing — M.A. and D.C.; Supervision — M.A. and D.C.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G34, M40, M14

Received: 26.08.2024
Revised: 28.12.2024; 18.08.2025
Accepted: 22.09.2025
Published online: 24.09.2025

How to cite this paper: Akinsola, T., Adelowotan, M., & Coetsee, D. (2025). Female outside directors and organisational performance: Exploring corporate governance, leadership and diversity theories. Journal of Governance & Regulation, 14(4), 8–18. https://doi.org/10.22495/jgrv14i4art1