Title: Sustainability and stability through gender-diverse boards in SMEs

Authors: Charbel Salloum; Renato Pereira; M. Naguib Omar; Summeya Gafur; Vânia Janela

Addresses: Métis Lab, EM Normandie Business School, 30-32 Rue Henri Barbusse, 92110 Clichy, France ' Business Research Unit, Iscte University Institute of Lisbon, Avenida das Forças Armadas, 1649-026, Lisboa, Portugal; City University of Macau, Avenida Padre Tomás Pereira, Taipa, Macao ' ISCIM – Instituto Superior de Comunicação e Imagem de Moçambique, Campus Mapulango, Rua dos Irmãos Roby, 224, Maputo, Mozambique ' ISCIM – Instituto Superior de Comunicação e Imagem de Moçambique, Campus Mapulango, Rua dos Irmãos Roby, 224, Maputo, Mozambique ' ISCIM – Instituto Superior de Comunicação e Imagem de Moçambique, Campus Mapulango, Rua dos Irmãos Roby, 224, Maputo, Mozambique

Abstract: This study examines the impact of board gender diversity on the financial performance and stability of Portuguese SMEs, drawing on resource dependence theory. Using a cross-sectional survey of 224 SMEs between 2022 and 2024, results show that board gender diversity significantly enhances profitability, measured by return on assets, and reduces earnings volatility. The findings further reveal that internal control quality and sustainability commitment positively moderate the relationship between board gender diversity and financial outcomes, strengthening the firm's strategic capacity. Robustness tests, including bootstrapped standard errors and alternative diversity measures, confirm the stability of the results. This research extends resource dependence theory to smaller firms and demonstrates that diversity's benefits depend critically on internal governance structures and stakeholder engagement practices. For SME managers, board diversity emerges as a strategic lever for growth and resilience rather than mere compliance. Policymakers are encouraged to support capacity-building initiatives that integrate diversity, governance quality, and sustainability frameworks. Overall, the study highlights that gender-diverse boards, when embedded within robust governance systems, substantially improve SME competitiveness, stability, and strategic adaptability. Future research should explore longitudinal dynamics and intersectional diversity effects across different institutional and industry contexts.

Keywords: board gender diversity; financial performance; internal control quality; sustainability commitment.

DOI: 10.1504/IJESB.2026.156151

International Journal of Entrepreneurship and Small Business, 2026 Vol.59 No.2, pp.162 - 179

Received: 06 Jun 2025
Accepted: 12 Aug 2025
Published online: 07 Sep 2026 *

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