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Female directors on boards. The impact of faultlines on CSR reporting

M. Camino Ramon-Llorens (Department of Economics, Financial and Accounting, Universidad Politecnica de Cartagena, Cartagena, Spain)
Emma Garcia-Meca (Universidad Politecnica de Cartagena, Cartagena, Spain)
María Consuelo Pucheta-Martínez (Universitat Jaume I, Castellón, Spain)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 20 July 2020

Issue publication date: 16 January 2021

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Abstract

Purpose

This paper aims to analyze the role of female directors on CSR disclosure. It assumes the existence of faultlines when studying gender diversity and classifies female directors into three categories: industry experts, advisors and community leaders. It also examines the influence of the power of female directors as a moderator on the association between female director categories and CSR disclosure.

Design/methodology/approach

The paper bases on a dynamic generalized method of moments panel estimator which allows controlling for the unobservable heterogeneity and endogeneity and reduces the estimation bias.

Findings

Results confirm the double-sided nature of gender diversity, noting different behavior among female directors according to their experience and backgrounds. Moreover, the dominating owner position of female directors can balance and moderate the effect of female directors appointed for their technical knowledge or political and social ties. The results also confirm the necessity to not consider all women directors as a homogeneous group and explore the influence and interrelations of female faultlines on CSR disclosure.

Practical implications

The paper highlights the need to consider the specific skills, expertise, and connections of female board members when analyzing the effect of board composition, and supports the view that firms should emphasize the unique human and social capital of directors to understand how boards impact on firm strategies. Specifically, the authors support the recommendations of the European Commission (2011) regarding the need to increase skills and expertise when selecting new non-executive female board members.

Social implications

At a time when most governments are introducing active policies that require firms to nominate women to boards, the understanding of the consequences of women’s presence on boards and the interrelations between female power and the diverse categories of female directors is timely and important.

Originality/value

To the best of the authors’ knowledge, this is the first paper that provides empirical evidence to the scarcely studied area of the human and social capital of female directors’ roles in CSR disclosure, providing an alternative view of the role of women in corporate board effectiveness.

Keywords

Acknowledgements

The authors wish to acknowledge financial support from the Spanish Ministry of Economy, Industry and Competitiveness for the research project ECO 2017–82259-R.

Citation

Ramon-Llorens, M.C., Garcia-Meca, E. and Pucheta-Martínez, M.C. (2021), "Female directors on boards. The impact of faultlines on CSR reporting", Sustainability Accounting, Management and Policy Journal, Vol. 12 No. 1, pp. 156-183. https://doi.org/10.1108/SAMPJ-07-2019-0273

Publisher

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Emerald Publishing Limited

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