Digital orientation and gender diverse boards: unpacking the performance link in innovative SMEs
Ludovica Antenozio, Hussain Muhammad, Daniela Di Berardino, Augusta ConsortiPurpose
This study aims to examine whether and how digital orientation relates to financial performance in innovative small and medium-sized enterprises (SMEs), and tests whether board gender diversity conditions this link using the resource-based view and upper echelons theory.
Design/methodology/approach
Using panel data from 250 innovative Italian SMEs, this study examines the effect of digital orientation on performance and assess moderation by female board representation. The study employs multiple model specifications and robust estimation to address endogeneity.
Findings
The results show that digital orientation is positively associated with Return on Assets and Tobin’s Q, showing that a stronger digital strategic posture improves financial performance. However, board gender diversity weakens this relationship: as the share of women directors increases, the financial returns to digital orientation decline. This suggests that gender-diverse boards may strengthen scrutiny and risk evaluation but can also slow digital execution in resource-constrained SMEs.
Practical implications
Managers and directors should match digital initiatives with board skills, clear investment criteria and decision routines that preserve oversight without slowing implementation. For gender-diverse boards, digital literacy, structured preparation and explicit roles can help firms benefit from broader perspectives while maintaining execution speed.
Originality/value
This study positions gender-diverse boards as a governance mechanism that shapes the payoffs of digital orientation in resource-constrained, innovative SMEs, providing panel evidence from Italy that clarifies why prior results have been mixed.