Effect Of Board Gender Diversity Research Articles

Effect of Corporate Governance on Financial Distress: Evidence from Listed Firms at Ghana Stock Exchange

This study was conducted to determine the effect of corporate governance on financial distress of listed firms at Ghana Stock Exchange (GSE) using panel data from 2015 to 2019. Specifically, the study focusses on: The effect of board size on financial distress of listed firms at GSE, the effect of board gender diversity on financial distress of listed firms at GSE, the effect of ownership concentration on financial distress of listed firms at GSE and the effect of number of non-executives on financial distress of listed firms at GSE. OLS Regression Model has been conducted using EVIEWS 11. The data has been validated using normality, multicollinearity and Heteroscedascity test as recommended by previous research due to their robustness. The study found that 15.5% variability in financial distress of listed companies is explained by corporate governance practices of the listed companies. This result suggests that a unit change in corporate governance practices will bring about 12.5% changes in financial distress management. The study found that board size was significant determinant of financial distress. Again, the study further found that board diversity was significant determinant of financial distress. Moreover, the study found that managerial experience of the board was significant determinant of financial distress. However, non-executive and capital structure was not determinants of financial distress. The study concludes that corporate governance exerted significant influence on financial distress of listed firms at Ghana Stock Exchange. The study recommends that selected firms at GSE must develop and formulate good policies to help regulate and manage board members so that the decision-making process of the firm can be facilitated to achieve firm goals and objectives while maintaining financial stability.

The moderating effect of board gender diversity on the relation between corporate social responsibility and firm value

The moderating effect of board gender diversity on the relation between corporate social responsibility and firm value

Dividend Policy Pada Perusahaan Manufaktur Dengan Variabel Kontrol Firm Size

The purpose of this study is to empirically prove the effect of board gender diversity, independent board, and foreign ownership on dividend policy with firm size as the controlling variable in manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period 2017-2019. Based on the predetermined criteria, 53 manufacturing companies were selected as samples in this study using purposive sampling method. The analytical method used in this study is multiple linear regression using EViews 11. The results of this study indicate that foreign ownership has a positive and significant effect on dividend policy, while gender diversity and independent boards have a positive and insignificant effect on dividend policy. Firm size as controlling variable has a significant effect on dividend policy.

Effects of other comprehensive income on audit fees and audit report lag in Egyptian firms: does board gender diversity matter?

PurposeThis paper aims to (1) investigate the effect of other comprehensive income (OCI) on audit fees (AF) and audit report lag (ARL) and (2) test the moderating effect of board gender diversity (BGD) on such relationships.Design/methodology/approachThis paper uses data extracted from the financial reports for a sample of Egyptian firms from 2013 to 2019, where the data are processed using the Panel Corrected Standards Errors (PCSE) and the Structure Equation Model (SEM).FindingsThe results reveal that (1) the OCI existence and OCI volume have a significant positive effect on AF and ARL, and (2) the presence of female directors on the board and the percentage of female representation affect the relationship between OCI and AF positively, but this effect on the relationship between OCI and ARL is insignificant.Research limitations/implicationsThis paper has some limitations, where the analysis uses a small sample of Egyptian listed firms, as well as, the measures that were used as proxies of the study variables, which do not necessarily express the most suitable ones.Practical implicationsThe results of this paper would (1) provide signals to the audit market, the professional bodies in Egypt and stakeholders about the determinants of AF and ARL, (2) provide guidelines that support the capital market authority to consider gender diversity in boards of companies taking into considerations its impact on AF and ARL, and (3) help the accounting setters in emerging economies as Egypt in drafting more suitable standards and guidelines regarding OCI.Originality/valueThis paper adds to the literature on OCI, where it investigates the effect of OCI on ARL, which was not yet studied in prior studies. Also, this paper complements and extends the literature by providing empirical evidence from one of the emerging markets as Egypt about the effect of BGD on the relationships between OCI, AF and ARL, as these relationships have not been examined before.

The Impact of Board Gender Diversity on Sustainability Reporting and External Assurance: Evidence from Lower-Middle-Income Countries in Asia and Africa

Based on the notion that a diverse board will pay greater attention to social responsibility and stakeholder concerns, this article examines the effect of board gender diversity on the adoption of new sustainability reporting practices (i.e., SDG reporting) and on the use of external assurance. After controlling for corporate governance as well as companies’ performances, sustainability commitment, industries, and regions, we find that gender-diverse boards are positively associated with sustainability reporting and the involvement of an external assurance provider. This article consolidates and provides information on the relationship between women participation on corporate boards and sustainability reporting activities of 366 large Asian and African companies. Additionally, it addresses the understudied question of how the gender diversity of board resources affects the adoption of the external assurance of sustainability reporting and the types of assurance providers.

The Effect of Board Gender Diversity on Dividend Payments : Evidence from Indonesia

This research aims to analyze the impact of board gender diversity on dividend payments in Indonesia. Indonesia is one of the emerging economies. Some of the institutional specificities of emerging economies are the lack of protection of minority shareholders' rights, and market uncertainty may increase agency problems that raise doubts about future cash flows such as dividend payments. This research uses the data of listed firms from Indonesia Stock Exchange over the period 2013-2016. The data collection method uses purposive sampling. Indonesia implements a two-tier system that has directors and commissioners. We find evidence indicating that women directors are negatively related to the dividend payment, while women commissioners have positively related to the dividend payment. Moreover, we find that women independent directors, women executive directors, and women executive commissioners are positively associated with dividend payments, while women independent commissioners do not have an effect on dividend payments. The sample in this study is limited because the payment of dividends is not a necessity. This study provides the view that board gender diversity can create systems that make better decisions and encourage women to have a chance to participate in top management.

Assessing the Effect of Board Gender Diversity on CSR Reporting Through Moderating Role of Political Connections in Chinese Listed Firms

This study departs from existing work on board gender diversity (BGD) and corporate social responsibility (CSR) reporting by analyzing and explaining the mechanism by which gender-diverse boards in politically embedded firms (PEFs) affect firms’ CSR reporting choices in a unique institutional setting of Chinese listed firms from 2010 to 2018. The following main results are obtained. First, having female directors and executives with political connections (PCs) on corporate boards improves the CSR reporting of firms. Firms with PCs have a greater possibility to issue CSR reports than their non-connected counterparts. Second, firms that have both gender diversity and PCs on their boards of directors are more likely to engage in CSR reporting. There is an indication that the presence of PCs on boards can strengthen the effect of female directors on firms’ CSR reporting. Third, the presence of female directors on corporate boards has a stronger relationship with CSR reporting in PEFs than in non-PEFs. The study concludes that both BGD and PCs on corporate boards positively influence the diffusion of CSR-related practices in the Chinese business environment.

Does board gender diversity affect capital structure decisions?

PurposeThe purpose of this paper is to investigate the indirect relationship between board gender diversity and capital structure decisions and to examine whether the capital structure is affected by the type of approach used to promote women’s participation in the boardroom.Design/methodology/approachBased on a sample of French non-financial listed companies over the period 2006–2019, this paper uses structural equations modeling, difference-in-differences using propensity score matching and chow test to highlight these effects.FindingsThis paper finds that the relationship between the board gender diversity and the capital structure is mediated through the information transparency channel and firm risk taking channel. Furthermore, the results show that the effect of board gender diversity on capital structure decisions varies through the approach adopted (voluntary, enabling or coercive).Originality/valueThis paper contributes to the literature in several ways. First, the study is to the knowledge the first to examine whether and how board gender diversity affects capital structure decisions through two mediations channels, namely, the information transparency and the firm risk taking. Second, the study is one of the first to examine whether the capital structure is affected by the type of approach used to promote women’s participation in the boardroom: coercive, enabling or voluntary approach.

Pengaruh Board Characteristics Dan Profitability Terhadap Manajemen Laba

The purpose of this research is to determine the effect of board gender diversity, board size, board meetings, and profitability on earnings management. This research used panel data of manufacture companies listed on Indonesia Stock Exchange during 2017-2019. This research used purposive sampling method. The total sample of this research is 30 companies. Data is analyzed using multiple linear regression with EViews (Econometric Views) 10. The result shows that board size has significant positive effect on earnings management, meanwhile board gender diversity, board meetings, and profitability have insignificant effect on earnings management. The implication of this study is the need to decrease company’s board size to decrease collusion and earnings management practice which will increase investor’s belief.

Contingent Effect of Board Gender Diversity on Performance in Emerging Markets: Evidence from the Egyptian Revolution

The 2011 Egyptian revolution was associated with significant political and social upheaval, followed by societal changes and attempts by policymakers to reduce the marginalisation of women and promote their inclusion in the economy. Drawing on this background, the authors compare the effect of board gender diversity before and after the revolution. Results indicate that gender diversity in corporate boards is coupled with improvements in firm performance in the immediate post revolution phase. This evidence provides insights into the contextual factors related to diversity and performance relationship and supporting arguments for regulatory changes to further encourage women’s representation on boards.

Biodiversity disclosure, sustainable development and environmental initiatives: Does board gender diversity matter?

AbstractModern‐day corporations are under intense stakeholder pressure to incorporate environmentalism, particularly biodiversity initiatives, into their business strategy. Building on upper echelon and gender socialization theories, we investigate the effect of board gender diversity (BGD) on the biodiversity initiatives undertaken by firms for the restoration and rehabilitation of damaged ecosystems and/or to minimize their environmental impacts. Using data on 2406 US firms covered in the ASSET4 database for the period 2002–2018 (15,337 firm‐year observations), we document a significant positive association between BGD and both biodiversity restoration protection and impact reduction initiatives. Our findings are consistent for exploitative and nonexploitative industries, as well as for the pre‐ and post‐UN resolution on conservation of biodiversity periods. We further develop a causal relationship through the positive impact of BGD on management environment training and environmental partnerships—possible mechanisms by which BGD may impact biodiversity initiatives. The results suggest that BGD is vital for developing strategies concerning the restoration, protection and impact reduction of biodiversity and ecosystems. Our findings are of interest to legislators and regulators who are interested in assessing biodiversity initiatives, improving environmental policies and promoting gender diversity in company director boards.

Securities litigation risk and board gender diversity

We investigate the effect of board gender diversity on the risk of securities litigation. We find that this risk is inversely related to the fraction of female independent directors on a firm's board. Additionally, the effectiveness of these directors in reducing securities litigation risk is negatively related to the firm's monitoring costs and positively related to its complexity. We further investigate the channels through which female independent directors may reduce the risk of securities litigation and attribute the reduction to improvements in conditional accounting conservatism and corporate social responsibility policy.

Impact of gender diversity in boardroom on risk-return profile of Indian corporates

PurposeThe existing literature point that the presence of women directors in a firm reduces its risk. However, the relation between boardroom gender diversity and a firm’s return is widely disputed leading to no concrete answer. Some studies mention that women directors have a positive impact on firm performance, whereas, on the other hand, some findings suggest that women directors reduce financial performance. This paper aims to study the relationship of firm risk and return with boardroom gender diversity and the net impact on firm performance in the Indian context. This study uses not only traditional measures of risk and return but also the third measure of risk-adjusted returns to postulate its findings.Design/methodology/approachBased upon the data of the top 100 of the Bombay Stock Exchange-500 firms for the period FY 2009–2010 to FY 2018–2019, this study applied fixed effect panel regression and random effects Tobit regression to examine the effect of board gender diversity on firm performance.FindingsThe study concludes that firms with women directors on board have lower risk and lower returns. It also results in a higher risk-adjusted return, creating a positive impact on a firm’s performance.Originality/valueThe paper contributes to the existing literature on corporate governance by considering return, risk and risk-adjusted returns in single research to have a holistic measure of firm performance. It provides empirical evidence from one of the largest emerging economies, India where the female director and independent female director have been introduced recently.

Does board gender diversity weaken or strengthen executive risk-taking incentives?

We investigate the effect of board gender diversity on managerial risk-taking incentives. Our results demonstrate that companies with stronger board gender diversity provide more powerful executive risk-taking incentives. It appears that female directors’ risk aversion exacerbates managers’ risk aversion, resulting in a sub-optimal level of risk-taking. To offset this tendency for too little risk, companies are induced to provide stronger risk-taking incentives. Specifically, an increase in board gender diversity by one standard deviation raises vega by 10.3%. Further analysis corroborates the results, including propensity score matching, entropy balancing, and an instrumental-variable analysis. Endogeneity appears to be unlikely, suggesting that female directors are not merely associated with, but probably bring about stronger risk-taking incentives.

Boardroom gender diversity and corporate environmental performance: a multi-theoretical perspective in the MENA region

PurposeDrawing on the multi-theoretical perspective, the primary purpose of this paper is to empirically investigate the inextricably entwined nexus between board gender diversity and corporate environmental performance within cross-country context.Design/methodology/approachMultiple regression analysis on a cross-country panel data analysis was used. Further, the authors applied static panel data estimator ordinary least squares (OLS) as a baseline model with different proxies of gender diversity. In addition, to control for the potential endogeneity problem and providing robust findings, the authors run two-stage least squares (2SLS) and lagged independent variables.FindingsThe findings clearly unveiled that corporate environmental performance is positively and significantly affected by the level of gender diversity on board. This inextricable and intimate nexus is vastly attributed to the argument that female directors show greater concerns for eco-friendly activities.Practical implicationsThe findings of this study provide useful and fruitful insights for regulatory parties and policymakers to mandate gender quota in electing boardroom members to ameliorate corporate environmental performance.Originality/valueTo the best of the authors’ knowledge, most of the prior studies have not yet provided a multi-theoretical analysis of the effect of board gender diversity on environmental performance. Thereby, this study handled this contemporary gap and went beyond the narrow perspectives by diving deep with cross-country analysis.

The Effect of Diversity of The Board of Commissioners on Bank Credit Risk in Indonesia

This study aims to determine: (1) the effect of board age diversity on bank credit risk, (2) the effect of board education diversity on bank credit risk, (3) the effect of board gender diversity on bank credit risk, and (4) the effect of board nationality diversity on bank credit risk. The population in this study are banking sector companies listed on the Indonesia Stock Exchange (IDX) in the 2014-2018 period. The sampling technique in this study used census sampling with a total sample of 37 banks. Data is collected from the bank's annual report. Fixed effect period regression analysis was used to test the hypothesis of this study. The results of this study indicate that: (1) board age diversity has a significant negative effect on bank credit risk, (2) board education diversity has a significant negative effect on bank buying credit risk, (3) board gender diversity has no significant effect on risk bank credit, (4) board nationality diversity has no significant effect on bank credit risk.

Does gender diversity on the board reduce agency cost? Evidence from Pakistan

PurposeThis study aims to examine the effects of board gender diversity on agency costs in non-financial firms listed on the Pakistan Stock Exchange (PSX).Design/methodology/approachMultiple regression analysis is used to determine the impact of board gender diversity on agency cost. The research used panel data consisting of 2,062 firm-year observations of 226 non-financial firms listed on the PSX from 2008 to 2019 to test the proposed hypothesis. In addition, the Blau and the Shannon indices were used to checking for robustness.FindingsThe results indicate that female presence on the board significantly reduces the agency cost and, hence, mitigates the principal-agent conflict. Moreover, consistent with the critical mass theory, it was found that boards with three or more female directors have a stronger impact on reducing the agency cost, as compared to two or fewer female directors on the board.Research limitations/implicationsThe sample was restricted to non-financial firms listed on the PSX only; therefore, the results reflect the attributes of Pakistan’s business environment. A similar analysis in the context of other countries may generate different results.Practical implicationsThe findings imply that female directors play an important role in reducing agency conflicts between shareholders and managers by enhancing monitoring through effective governance mechanisms. The policymakers, therefore, should focus on female career development and encourage professional training programmes to generate a fair, competitive environment for senior female management.Originality/valueThis study attempts to fill the literature gap in that no similar study covers the non-financial firms’ listed firms in Pakistan. The paper supports the reforms made by the code of corporate governance by making the placement of female directors mandatory on Pakistani corporate boards. Overall, support is provided for the view that regulators should favour gender quotas regarding the composition of the board management team of listed firms to reduce agency conflicts and gain shareholder confidence.

Product market competition, board gender diversity and corporate sustainability performance: international evidence

PurposeThis study aims to investigate whether board gender diversity is associated with corporate sustainability performance and whether industry-level product market competition moderates the effect of board gender diversity on corporate sustainability performance.Design/methodology/approachThis study uses international data extracted from global ESG data set from Thomson Reuters (Refinitiv) database. Using data of 23,137 firm-year observations from 37 countries, the authors perform regression analyses to examine the hypotheses.FindingsThe findings show that firms with high board gender diversity exhibit high corporate sustainability performance. The authors also find firms in highly competitive industries to have low corporate sustainability performance. In highly competitive industries, the positive relationship between board gender diversity and corporate sustainability performance is weakened. The results are robust to various specification tests such as alternative measures for corporate sustainability performance, board gender diversity, product market competition and also the use of propensity score matching to address endogeneity issue. Overall, the results support the prediction that board diversity and product market competition play a substitutive role in influencing corporate sustainability performance.Research limitations/implicationsThis study offers empirical evidence that the appointment of female directors is a useful way to improve a firm’s corporate sustainability performance, hence, providing significant benefits in terms of stakeholders’ values and corporate reputation.Practical implicationsThis study provides useful insights to investors and policymakers that intense industry competition might mitigate the role of board governance, particularly board gender diversity, in enhancing corporate sustainability performance.Originality/valueUsing an international data set, where the observations operate in various market and institutional differences, this study is able to extricate the positive impact of board gender diversity and product market competition on corporate sustainability performance. This study corroborates evidence that sustainability strategy and initiatives are reflections of integrated factors, including corporate governance as internal driver and market forces faced by firms as external driver.

Board gender diversity, financial decisions and free cash flow: empirical evidence from Malaysia

PurposeThis study aims to explore the role of board gender diversity in enhancing the allocation of free cash flow (FCF). It examines the direct effect of board gender diversity, as well as its indirect effect, through debt and dividend policies, on the level of FCF.Design/methodology/approachThis study applies a three-stage least squares regression analysis for a sample of 367 Malaysian listed firms over the period 2011–2019.FindingsThe results show that female directors significantly deter the opportunistic behavior of managers. The authors find that gender diversity – as measured by the percentage of women on the board and the percentage of female independent directors are likely to reduce excess funds. Moreover, the results reveal a significant indirect effect of board gender diversity, through dividend payouts, on the efficient allocation of FCF. The results are consistent with those in prior studies that document the benefits of board gender diversity.Practical implicationsThe research findings are beneficial to policymakers, as it allows them to assess the importance of diversity on boards in the monitoring of the managers, particularly as it pertains to the allocation of excess funds. Furthermore, these findings have implications for regulators as they shed light on the importance to undertake measures and reforms to promote board effectiveness by the introduction of gender diversity.Originality/valueWhile prior research has examined the effect of board gender diversity on firm performance, the study is the first to investigate both the direct and indirect effect of board gender diversity on the allocation of FCF.

Board Gender Diversity and its Impact on Firm Innovation Strategies

We examine the effect of board gender diversity on innovation outcomes. Using upper-echelons and construal level theory, we argue that female representation on corporate boards increases the diversity of information sets, influences how information is processed, generates within-person changes in board member construal, and thereby affects the board’s decisions related to innovation strategies. Consequently, board gender diversity is not only likely to affect the quantum of innovations, but also the impact of innovations, and a greater tendency to aim for moon shots – that is high risk, high value innovations. Using 20 years of panel data and instrumental variable (IV) regressions, we find that board gender diversity is positively associated with the quantum, impact, and risk of innovations. We explore the path through which board gender diversity influences innovation outcomes. Results indicate that existence of female innovators is an important mediator of the positive relation between board gender diversity and innovation outcomes. Further, the information brought by women directors from their membership in other corporate boards significantly influences innovation. Innovation outcomes positively influence firm financial performance in subsequent periods. We conclude that board gender diversity is a crucial driver of innovation strategy.