Board Diversity and Underpricing of Initial Public Offering (IPO) Companies: A Case Study on the Indonesia Stock Exchange

Abstract

In the initial public offering (IPO) process, a phenomenon often occurs where the initial price is lower than the market price on the first day of trading, often referred to as underpricing. Many factors influence the occurrence of underpricing, but this study aims to examine the influence of board diversity on underpricing. The board diversity variables that are expected to influence underpricing are board independence (BIND), board of commissioners (BCO), board size (BSZ), women on board (WOB), related board management (RBM), and board age (AGE). The population in this study were companies conducting initial public offerings between 2010 and 2024, with a sample of 437 companies. Hypothesis testing used panel data regression. Based on the model test results, the best panel data regression model was the fixed effect model. The results showed that the hypothesis was accepted: board independence (BIND), board of commissioners (BCOM), and women on board (WOB), while the variables board size, related board members (RMB), and board age did not affect underpricing.