Board diversity: female director participation and corporate innovation
International Journal of Accounting & Information Management
ISSN: 1834-7649
Article publication date: 21 December 2020
Issue publication date: 11 May 2021
Abstract
Purpose
This study aims to examine the impact of board female participation on Australian firms’ innovation.
Design/methodology/approach
Data are from the 500 largest Australian Securities Exchange (ASX)-listed companies for 2004–2015. Measures of innovation concern input (research and development expenditure and intangible assets) and output (patents registered) indicators.
Findings
A positive and significant association exists between female director participation and firm innovation activity. This association exists across industry classifications independent of technological importance and is particularly driven by materials and health-care sectors. Findings support calls for more board diversity in line with board female membership positively influencing innovative investment and development activities.
Practical implications
The economic efficacy of the latest revisions to the ASX Corporate Governance Council principles and recommendations (“ASX CGC revisions”) is supported. Diverse boards are a strong source of innovation. Regulators and corporations can use the findings to establish principles and practices that promote female board diversity.
Originality/value
This study is the first to examine the link between board diversity and corporate innovation in Australia where there is under-representation of women on corporate boards and in key management positions. Also lacking are formal legislative or governance policy mandates on board gender diversity. Beyond confirming a positive association between board diversity and levels of corporate innovation, this paper provides new findings that this relationship is driven by women who are non-executive (independent) directors, independent of the underlying technology intensity of firms and moderated by the nature of firm-level profitability and growth opportunities.
Keywords
Acknowledgements
Corrigendum: It has come to the attention of the publisher that the article Vafaei, A., Henry, D. and Ahmed, K. (2020), “Board diversity: female director participation and corporate innovation”, published in International Journal of Accounting & Information Management, Vol. ahead-of-print No. ahead-of-print, had omitted an author. The author Mohammad Alipour, along with their affiliation details, has now been added to the online article. The authors sincerely apologise for this.
Citation
Vafaei, A., Henry, D., Ahmed, K. and Alipour, M. (2021), "Board diversity: female director participation and corporate innovation", International Journal of Accounting & Information Management, Vol. 29 No. 2, pp. 247-279. https://doi.org/10.1108/IJAIM-06-2020-0080
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited