This study examines the relationship between gender diversity (women on the board and women on the audit committee) and a firm’s financial stability. The ordinary least square analysis was used to determine the relationship. To measure the financial stability of Malaysian suspect firms, i.e., firms with the lowest positive earnings, the Altman (1993) Z-Score measurement was utilized. The results indicate that women on the board are significantly and negatively associated with the firm’s financial stability. That is, they are related to low financial stability, which contradicts the agency and resource dependence theories. Regarding women directors on the audit committee, there is no significant relationship with financial stability, meaning that they cannot protect the company against financial distress. These results are robust and do not change when using different measurements of gender diversity, one-year lag of independent variables, and other methods of analysis, namely random effect panel data. This study is the first to alert policymakers, stakeholders, researchers, and society in general to the need to re-evaluate and strengthen the role of women directors in improving firms’ financial stability, particularly in emerging economies like Malaysia.

Abstract
1. Introduction
2. Literature Review
3. Hypothesis Development
    3.1. Women on the Board
    3.2. Women on the Audit Committee (AC)
4. Research Methodology
    4.1. Sample Selection
    4.2. Regression Models
    4.3. Descriptive Statistics
    4.4. Diagnostic Tests
5. Results and Discussion
6. Robustness Tests
    6.1. Regression Using Different Measurement ofGender Diversity
    6.2. Regression using the Lag of the IndependentVariables
    6.3. Regression Using Different Method ofAnalysis (Random Effect Panel Data)
7. Conclusion
References

• Mujeeb Saif Mohsen AL-ABSY(Department of Accounting and Finance, College of Administrative and Financial Sciences, Gulf University, Kingdom of Bahrain) Corresponding Author
• Qais ALMAAMARI(Department of Administrative and Human Resource, College of Administrative and Financial Sciences, Gulf University, Kingdom of Bahrain)
• Tamer ALKADASH(Department of Administrative and Human Resource, College of Administrative and Financial Sciences, Gulf University, Kingdom of Bahrain)
• Ammar HABTOOR(Faculty of Oil and Minerals, University of Aden, Aden, Yemen)