The Effect of Board Gender Diversity on Cost of Debt and Dividend Payouts: An Empirical Evidence from Companies Listed in the Egyptian Stock Exchange

This research aims to study and examine the relationship between board gender diversity and both cost of debt and dividend payouts. By using a sample from the non-financial companies listed in the Egyptian Stock Exchange for the period starting from 2015 to 2018.
The research findings stated that: First; greater board gender diversity leads to increasing the cost of debt and higher level of dividend payouts; Were cost of debt, company's propensity to pay dividends, and level of dividend payouts are significantly positively affected by the presence of at least one female director, the number and proportion of female directors, and/or the the number and proportion of female executive. Second; more importantly, there is a critical mass of board gender diversity that is required to improve the board effectiveness; as when the proportion of female directors is more than 40%, cost of debt has decreased, company's propensity to pay dividends increased, while; when the proportion of female directors ranged between 20% and 40%, the level of dividend payouts increased. These findings support the recent decisions of Egyptian Financial Supervisory Authority (EFSA) that the percentage of women's representation on board shall not be less than 25%, or at least two members.