The impact of board diversity on financial distress in property and real estate companies

Abstract

The low demand for real estate is reflected in the slow growth of global property prices in 2023. This is impacted by the state of the world economy, which did not grow significantly in 2023. In addition to the sluggish expectation for economic growth, the prospects for the global real estate industry in 2024 are anticipated to be characterized by uncertainty. Therefore, the Board of Directors' duty is essential to lessen the financial distress of Indonesian publicly traded property and real estate companies in order to prevent bankruptcy that starts with financial distress. The goal of this study is to investigate experimentally how board diversity may affect the financial crisis status of real estate and property enterprises between 2019 and 2024. Panel data regression analysis is used in this quantitative, descriptive study methodology. The results of the study show that while board duality has been shown to have no detrimental effect on the financial distress condition of real estate and property companies, the number of female directors and the size of the board can lessen the company's financial crisis situation.