Does Board diversity and Financial ratio predict the risk of financial distress?? Evidence from Indonesia

Abstract

COVID-19 caused the world financial crisis, as evidenced by the number of companies experiencing financial distress. This study aims to identify companies in the transportation sector experiencing the financial distress by using internal and external financial ratios and board diversity predictors. The research method used is a positivist paradigm with a comparative causal approach. Research focuses on transportation sector companies with 27 companies, five years of observation with 137 units of analysis, with a purposive sampling technique. The results showed that independent commissioners did not affect financial distress. Managerial ownership and gender diversity can reduce the risk of financial distress. Profitability and leverage have a positive effect on financial distress