Proportion Of Female Directors Research Articles

Corporate governance and financial fraud occurrence – case study on Romanian companies

PurposeThe aim of this study is to approach the way in which corporate governance influences the occurrence of financial fraud, as expressed by the M-Beneish score. In order to get further into the topic, we have first computed a corporate governance score based on the comply-explain statement and then selected a few elements that are part of the corporate governance reporting: equilibrium of board members (EQUIL), independence of board members (INDEP), selection of the board members (NOM), remuneration policy (REM), audit committee (AUDIT) and the proportion of female directors on boards (GenF). They were tested, one by one, using the financial fraud score to see the way in which they interact.Design/methodology/approachThe study is conducted on a sample of 65 companies listed on the Bucharest Stock Exchange (BSE) for the 2016–2022 period. The data were processed using three-stage general least square [general least squares (GLS), with iteration, igls and option] with a common first-order panel-specific autocorrelation correction, so as to explain how a poor adoption of the corporate governance score and its elements has a negative implication for the M-Beneish score, controlling for the auditor opinion, type of auditing company and if the company is privately owned.FindingsThe results support most of our research hypothesis, revealing that a poor adoption of the corporate governance score and its components – AUDIT, EQUIL, INDEP and GenF – negatively influences the M-Beneish score, i.e. a low corporate governance score will lead to an increase in financial fraud. This is an encouraging aspect, for an improved adoption of the corporate governance principles reduces the occurrence of financial fraud.Research limitations/implicationsThis is a study that concerns the relationship between corporate governance and financial fraud for the case study for Romania.Practical implicationsThe study highlights the importance of adopting the corporate governance code applied to the Romanian business environment. By measuring the presence of financial fraud appearance through the M-Beneish score, we have managed to outline the negative relationship between the two components. Thus, it is an important aspect of which companies should take account, so they will have long-term benefits and ensure the continuity of the business.Social implicationsThe policy implications of this project are for policymakers, so that they will understand how a good corporate governance mechanism will enhance high-performing businesses. Different aspects regarding corporate governance were validated and are in the process of being validated. Managers can extract and try to understand and apply the good characteristics of corporate governance for the well-being of their companies. At a broader level, the macroeconomic environment will increase its own well-being while encouraging market players to enhance qualitative corporate governance reporting. There is no doubt that corporate governance has a positive impact on businesses.Originality/valueThe study highlights the importance of adopting the corporate governance code as applied to the Romanian business environment. By measuring the occurrence of financial fraud using the M-Beneish score, we have managed to outline the negative relationship between the two components. Therefore, this is an important aspect that companies should take into account in order to have long-term benefits and ensure the continuity of their business.

Does environmental, social, and governance practice boost corporate human capital inflow in China? From the perspective of stakeholder response

AbstractFew studies have answered how different stakeholders' responses to environmental, social, and governance (ESG) practice, including creditors, investors, and media, influence the relationship between ESG practice and high‐quality job‐seekers, which is reflected in corporate human capital inflow. Therefore, we analyze the nexus above theoretically from the perspective of stakeholder theory and examine empirically whether corporate ESG practice can promote corporate human capital inflow, drawing on 8924 firm‐year observations of Chinese‐listed companies during 2011–2020. The findings demonstrate that ESG practice stimulates corporate human capital inflow, which is enhanced when economic policy uncertainty, debt costs, equity costs, or the proportion of female directors is high, whereas weakened when the negative media coverage is high. Further research finds that an underlying mechanism, via corporate visibility, ESG practice can prompt corporate human capital inflow and that the elevating role is more significant in non‐state‐owned or non‐manufacturing enterprises than in state‐owned or manufacturing. Overall, our findings provide a new standpoint to comprehend the interaction of different stakeholder's responses to ESG practice, which enables scholars and managers to understand ESG practice and its effects better.

Does Gender Diversity among the Board of Directors Significantly Affect a Company's Financial Performance?

In recent years, the issue of women's representation on corporate boards has gained considerable attention. The presence of women on boards is believed to enhance their effectiveness. This study aims to investigate whether the gender composition of corporate boards plays a crucial role in the financial performance of the manufacturing sector, which is a significant contributor to Indonesia's economic growth. Purposive sampling led to the selection of 85 companies that met the criteria, resulting in a total sample of 680 companies over an eight-year period. Gender diversity is assessed using the proportion of female directors, while financial performance is measured by Tobin's Q. Additionally, six control variables are included in this study, namely the board of commissioners, board size, firm size, leverage, age, and market value. The analytical data calculations were conducted using STATA 13 software to ensure more precise results. The results from the regression tests reveal a significant positive impact of gender diversity on financial performance, both with and without the control variables. Furthermore, these findings provide support for two prominent theories: agency theory and resource dependence theory.

Female in The Boardroom and Firm Performance: An Insight of Indonesia’s Firms

The purpose of this research is to determine the impact of female board members on firm performance. This study employed a purposive sampling technique with a research sample comprised of 264 non-financial companies listed on the Indonesia Stock Exchange between 2013 and 2019. As proxies for the independent variable of females in the boardroom, this study examines female directors' presence, a dummy variable for female CEOs, the proportion of female directors, and female directors' business ability. The return on assets (ROA), return on equity (ROE), and Tobin's Q are all proxies for gauging corporate performance. This study's analysis technique is robust regression analysis. Female board members had the greatest influence on firm performance, according to the findings. Overall, the female CEO dummy serves as a proxy for the strength of the company's performance.

Does a Female Director in the Boardroom Affect Sustainability Reporting in the U.S. Healthcare Industry?

In this in-depth study, we explored the nuanced dynamics of boardroom gender diversity and its consequential impact on sustainability reporting within the U.S. Healthcare sector. Leveraging a comprehensive dataset from Refinitiv Eikon, our analysis spanned a spectrum of 646 observations across 57 healthcare entities listed in the S&P 500, covering the period from 2010 to 2021. Our methodology combined various empirical techniques to dissect correlations, unravel heterogeneity, and account for potentially omitted variables. Central to our findings is the discovery that various metrics of board gender diversity, such as the proportion of female directors and the Blau and Shannon diversity indices, exhibit a robust and positive correlation with the intensity and quality of sustainability reporting. This correlation persists even when controlling for a multitude of factors, including elements of corporate governance (such as board size, independence, and meeting attendance), as well as intrinsic firm characteristics (such as size, profitability, growth potential, and leverage). The presence of female directors appears to not only bolster the breadth and depth of sustainability reporting but also align with a broader perspective that their inclusion in boardrooms significantly influences corporate reporting practices. These insights extend beyond academic discourse by offering tangible and actionable intelligence for policymakers and corporate decision-makers. By elucidating the intrinsic value of gender diversity in governance, our study contributes a compelling argument for bolstering female representation in leadership roles as a catalyst for enhanced corporate responsibility and stakeholder engagement.

Exploring the Affiliation of Corporate Social Responsibility, Innovation Performance, and CEO Gender Diversity: Evidence from the U.S.

This paper examines the relationship between CSR activities and innovation performance with the moderating effect of CEO gender in the U.S. market. This paper provides evidence about the relationship between CSR and innovation performance from the resources-based views by replacing the common measurements of innovation and R&D expenditures with the number of patents and citations to better measure the innovation quality rather than quantity. The current paper verifies the relationship between CSR and innovation in S&P 500 U.S. listed companies and fills the gaps in the current research on the moderating effect of CEO gender on this relationship. The paper analyzed the panel data for 1204 observations from various databases (Compustat, KLD, U.S. patents by words and Excompustat) from 2014 to 2018. Specifically, the number of patents and citations is set as the measurement of the explanatory variable; innovation performance and CSR scores from KLD are treated as the dependent variable and the proportion of female directors in the top management as the method of moderating indicator. The result in this paper shows a positive correlation between CSR and innovation performance in the U.S. At the same time, the moderating effect of CEO gender has an insignificant impact on this relationship. The findings suggest that the female CEOs do not have a positive relationship with corporate innovation. These results will help companies realize the importance of CSR activities and how to balance gender diversity in their strategies.

Does Corporate Governance Practices Influence Financial Performance and Corporate Growth: Indian Perspective

This article endeavours to investigate the impact of corporate governance practices on financial performance and corporate growth considering a sample of leading 88 non-financial companies listed on the National Stock Exchange for the period 2011–2020. Using static panel data technique, the results show that the proportion of female directors in boardrooms maintains a significant and positive association with corporate financial performance, while board independence and corporate financial performance are associated negatively. On the other hand, no noticeable relationships are found between board size, CEO duality, and corporate financial performance. Moreover, the results show that the proportion of female directors on boards and corporate growth are associated positively, whereas board size, board independence and CEO duality appears to have no significant associations with corporate growth. The results are re-examined by employing several tests, including sensitivity analysis and alternative model specifications and are held robust. The empirical findings offer considerable impetus for corporate policy makers or regulators to set up the needed policies and regulations in the light of strengthening corporate governance practices.

Research on the Impact of Female Directors on Capital Structure Adjustment -- Based on the perspective of crash risk

This paper selects all non-financial listed companies in Shanghai and Shenzhen A shares from 2010 to 2022 as the research object, based on dynamic capital structure theory, high-level echelon theory and resource dependence theory, through panel regression , to explore the impact of female directors themselves on the speed of capital structure adjustment; And introducing crash risk into the extended model to test the relationship between female directors and the speed of capital structure adjustment from the perspective of crash risk. The results show that the existence of female directors in the board of directors will optimize the capital structure, and the increase in the proportion of female directors in the board of directors will improve the speed of capital structure adjustment; Due to the characteristics of conservative and cautious women, the existence of female directors in the board of directors will reduce the risk of stock price collapse; Based on the perspective of collapse risk, female directors still improve the speed of capital structure adjustment.

Do Female CEOs Moderate the Link between Female Directors on Audit Committees and Audit Quality: Evidence from the UK

We examine female chief executive officers (CEOs) in the context of women directors on audit committees (ACs) and audit quality. Previous research has yet to examine whether the presence of a female CEO affects the relationship between female membership in AC and audit quality. This study focuses on FTSE 350 firms, covers the period 2009-2015, and utilizes ordinary least-squares regression to test our hypothesis. The research found a positive relation between the proportion of female directors on ACs and the quality of the audit in the event of a female CEO. Furthermore, the finding is robust to endogeneity bias. In addition, our result is robust to an alternative audit quality proxy. Appointing women to CEO roles in businesses can further increase the link between women on ACs and audit quality. In addition, the results of the study support the efforts of corporate governance regulators to expand the number of female directors.

Research on the Influence of Female Director Ratio on Business Performance -- Explanation from the Symbolism Theory

Due to the improvement of women's ability and status in the workplace, the role of female directors in corporate boards has also attracted extensive attention from scholars. Compared with Western countries' emphasis on women's rights and interests protection, the proportion of female directors in China is relatively low. The symbolism theory holds that companies appoint female directors only to signal to establish women in society, which is only a nominal appointment rather than based on female directors' characteristics or abilities. It has no relationship with the actual operation of the enterprise. Using the data of Chinese A-share listed companies from 2008 to 2018, this paper empirically proves that the presence of female directors has no significant impact on the business performance of enterprises.

Is it the mere female directors or their attributes that matter for the quality of corporate sustainability disclosures?

AbstractThis study aims to inquire whether it is the mere female directors or their certain attributes that improve the quality of corporate sustainability disclosures (QCSD). Annual and sustainability reports are used to obtain data for 300 non‐financial Pakistani listed companies selected through stratified random sampling for the period 2012–2021. The study employed ordinary least squares with panel‐corrected standard errors to test research hypotheses. The findings that neither support “tokenism” nor “critical mass” assumptions revealed that firms with female directors on the board, regardless of how many, have better QCSD than others. Similarly, the proportion of female directors on the board and audit committee also showed a positive association with QCSD. The positive role of independent female directors and their experience was slightly more pronounced than the executive female directors and their experience in improving QCSD. Likewise, the positive effect of female directors' business‐related education was marginally higher than their non‐business education in improving QCSD. Furthermore, female directors' master's or above level of education had a significant positive, while their bachelor's or below level of education had no significant association with QCSD. The study offers several theoretical and practical implications.

Gender diversity and corporate financial distress in the Pakistan stock market: the interacting effect of family-controlled companies

PurposeAs the benefit of gender diversity continues to receive significant attention, a holistic investigation of its effect on corporate financial distress (CFD) is lacking. Therefore, this study examines the effects of board gender diversity, measured in different forms, such as the presence and proportion of female directors, family-affiliated female directors and the chief executive officer (CEO) gender, on CFD in Pakistan. The study also investigates the interacting effects of family-controlled (20 and 50% family-owned) companies on the association between board gender diversity and CFD.Design/methodology/approachThe study applied the pooled cross-sectional logistic regression model to examine the effect of board gender diversity (presence and proportion of female directors, family-affiliated female directors and CEO gender) on CFD through a sample of 285 non-financial companies in Pakistan over the period of 2006–2017.FindingsThe results reveal that gender diversity on boards is significantly and negatively associated with CFD in Pakistan. In addition, when family ownership is 50% or more, the interacting effect of family control is found to be significant, while gender effects remain negative. The results suggest that female directors contribute to the long-term viability of companies, especially family-owned companies. Female directors are also found to be more prevalent in family-owned companies compared to their non-family counterparts.Research limitations/implicationsThe findings imply that female directors may efficiently manage and control all functions necessary to guarantee the company's long-term prosperity. Similarly, gender effects can outweigh the detrimental impact of family control when female directors are in reasonable numbers and of high quality in the boardroom.Practical implicationsThe practical relevance of the findings is that female directors play a significant role on the corporate board. Thus, it is a wakeup call for Pakistani companies to recognize the critical role and uniqueness of women on the corporate ladder. Family companies can also galvanize on the uniqueness of women to improve their governance structure.Originality/valueThis study adds to the literature on the benefits of gender diversity in family and non-family-owned companies. Specifically, this study applied multiple measures of gender diversity and family control in a single study. In addition, the study was conducted in a country that is ranked as the second worst country in the Global Gender Gap Index 2022, implying that investigating this type of research would go a long way towards changing the minds of corporate executives and regulators about the critical role that women can play in the economy.

Gender diversity as a CSR tool and financial performance in China

We utilize stakeholder, critical mass, and upper-echelon theories to investigate the effect of female representation on boards as corporate social responsibility (CSR) practices and firm performance of A-share listed companies in China. The indicators used were the proportion of female board members, the average age of female board members, the educational background of female directors, TOBIN Q, asset size, and leverage. We used fixed effects estimates and stationarity, stability, cointegration, and Hausman tests to analyze the data. We find that the proportion of female directors, the average age of female directors, and average educational level of female directors have a significant impact on CSR performance and financial performance, while CSR performance has a significant impact on financial performance. Given that emerging societies and their environments are usually the most susceptible to unethical corporate practices, our findings that female directors have a strategic role in enabling firms to manage their social responsibilities ethically and sustainable practices have important policy implications for regulators and stakeholders.

Group Polarization in Board Decisions about Strategic Change: Evidence from Chinese Publicly Listed Companies (2008–2018)

ABSTRACTStrategic management scholars have shown increasing interest in explaining strategic change from the perspective of cognitive bias. However, most studies focus on individual cognitive bias but pay little attention to group cognitive bias. This study introduces a typical group cognitive bias (group polarization) to explain strategic change decisions made by the board of directors. Following the theory of group polarization, we argue that, when the average prior strategic change experienced in performance decline by board directors is relatively high (or low), the focal strategic change in performance decline will become even higher (or lower). We further contend that the proportion of female directors and board versus CEO power as the contingencies can mitigate this group polarization effect. Our hypotheses were strongly supported by a longitudinal sample of Chinese publicly listed companies during 2008–2018. The study's framework and findings contribute to the contextualization of social psychology research on group polarization in the study of board's strategic decision-making.

Corporate governance characteristics of Japanese manufacturing companies and ISO 14001 adoption by their subsidiaries in Thailand

Companies have reported some voluntary initiatives such as obtaining an ISO 14001 certification to solve environmental problems and to achieve United Nation's Sustainable Development Goals. While ISO 14001 adoption has been studied extensively on the case of parent companies, there is not much prior research related to the parent-subsidiary relationship. This paper attempts to answer the question why Japanese subsidiaries in Thailand obtain ISO 14001 certification by focusing on corporate governance characteristics of Japanese parent companies such as board diversity and on the share of voting rights in their subsidiaries. We perform a logistic analysis using panel data from 117 subsidiaries in three industrial sectors (rubber products, machinery, and precise machinery) in 2017–2020. We find that characteristics such as direct voting rights in the subsidiaries and long business history of the parent companies have a strong positive correlation with ISO 14001 adoption by their subsidiaries in Thailand. The proportion of independent directors on the parent companies' boards exhibits only a slightly positive correlation. By contrast, our findings show no correlation with the proportion of female directors on the parent companies' boards due to the gender inequality gap in Japan. Our findings contribute to the empirical literature about voluntary environmental management in developing countries with regard to the parent-subsidiary relationship.

The Relationship between Corporate Governance and Firm Performance

This study examines the relationships between corporate governance attributes on firm performance of listed financial sector companies in Sri Lanka. Empirical analysis focused on 56 companies registered in the Colombo Stock Exchange (CSE) covering the industries of banking, finance and insurance for the years 2012, 2013, 2014 and 2015. The study used Ordinary Least Squares (OLS) method to analyze the data. The study finds that relationship between corporate governance and firm performance are not strong. Board size, proportion of independent directors and the proportion of female directors have not significant relationship with performance measures. But board effectiveness has a significant positive relationship with ROE. This study enables to companies to evaluate and restructuring of their board to enhance the performance of the company while contributing to the economic development of the country. Findings of prior study are more focused to the developed countries. This study fills that research gap and contribute to the present literature on corporate governance in the industries of banking finance and insurance.

How Much Does the Board Composition Matter? The Impact of Board Gender Diversity on CEO Compensation

The notion that female directors are better disposed to protect shareholders’ interests has brought boardroom gender diversity into the limelight. Echoing these emerging trends, this paper analyzes the relationship between board gender diversity, i.e., proportion of female directors on the corporate board, and Chief Executive Officer’s (CEO) compensation. Consistent with conjecture, the analysis suggests that large and diversified corporate boards are the main determinants of CEO compensation. Furthermore, longer-tenured CEOs who also serve as board chairperson receive higher total compensation and bonuses than their counterparts do. Into the bargain are corporate performance proxied by return of assets (ROA) and firm attributes, i.e., firm size and institutional ownership, which have divergent but direct implications for CEO compensation.

Research on the Influence of Corporate Governance Structure on Corporate Financial Performance

With the deepening of economic globalization, the topic of corporate governance has become a hot topic. Good corporate governance has a significant role in balancing the interests of all parties within the enterprise, and then improving the financial performance of enterprises. This paper studies the corporate governance data and financial data of a total of 4813 listed companies in China disclosed in the annual report of the listed companies and CSMAR database from 2015 to 2021 for seven consecutive years. The principal component analysis method is used to construct the corporate governance index, and the OLS multiple regression model is used to analyze the impact of corporate governance structure on corporate financial performance from three dimensions : ownership structure, board characteristics and management incentives. The study finds that ownership concentration, executive incentive and number of executives are significantly positively correlated with corporate financial performance. the board size and the proportion of independent directors are significantly negatively correlated with corporate financial performance ; the nature of equity, equity balance, and the proportion of female directors are not significantly correlated with corporate financial performance. The research results help investors to understand the development law and future trend of corporate financial performance through corporate governance structure, which is of great significance for enterprises to improve corporate governance structure and enhance financial performance. At the level of theoretical development, the conclusions of this study promote the academic research process in related fields.

Corporate political donations, board gender diversity, and corporate social responsibility: Evidence from Australia

We examine the association between corporate political donations (CPDs) and the quality of corporate social responsibility (CSR) disclosures by the Australian Stock Exchange (ASX) listed firms. We also explore the effect of board members’ gender diversity on this association. Consistent with legitimacy and neopluralist argument, we report a negative association between corporate political donations and the quality of CSR disclosures. Furthermore, board gender diversity acts as the moderator and mitigates the negative association between political donations and CSR disclosures. We also find that it requires more than one female director to moderate the association between CPDs and CSR disclosures which provides support to the critical mass theory. Our additional analysis reveals that the negative association between CPDs and the quality of CSR disclosures is stronger for the resource industry, and the proportion of female directors has an insignificant effect on this association.

Pengaruh Firm Characteristics Dan Board Characteristics Terhadap Corporate Social Responsibility Disclosure

The purpose of this research was to examine the effect of firm size, profitability, proportion of female directors, board size and leverage on CSR disclosure in manufacturing companies listed in the Indonesian Stock Exchange during the year 2017-2019. The research was conducted with a sample of 31 data from manufacturing companies. Furthermore, data collection techniques used in the research was purposive sampling. The data was processed using Eviews 11 program. The t test results showed that firm size had positive effect on CSR disclosure, while profitability, proportion of female directors, board size and leverage had no effect on CSR disclosure. The implication of this study was to increase the reliabilility of company’s financial report and to reduce the information asymmetry occurred between management and stakeholders.