BOARD GENDER DIVERSITY AND VOLUNTARY CORPORATE POLITICAL SPENDING DISCLOSURE

Abstract

ABSTRACT As corporations have played an essential role in political funding in the U.S., stakeholders increasingly demand transparency in corporate political spending. This paper examines the relationship between board gender diversity and voluntary disclosure of corporate political spending. Consistent with the stakeholder theory and legitimacy theory, we find that gender diverse boards are positively related with enhanced political spending disclosure. Specifically, we document a positive relationship between a higher ratio of female directors and increased voluntary disclosure quality. The relationship is not statistically significant when there are fewer than three female directors while the relationship is significant when there are at least three female directors, which substantiates critical mass theory. Further analysis shows that the gender balance is a significant indicator of higher quality disclosure among less diverse boards where one gender comprises more than 70%. Keywords Corporate Political Spending, Board Gender Diversity, Voluntary Disclosure