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Article
Publication date: 27 October 2022

Hyondong Kim and Youngsang Kim

This study elaborates on the process through which gender-diverse boards of directors increase representation of females in management positions. This study draws on the…

Abstract

Purpose

This study elaborates on the process through which gender-diverse boards of directors increase representation of females in management positions. This study draws on the gender spillover effect to examine whether gender diversity on boards of directors significantly influences the number of women promoted to managerial positions. The authors also employ implicit quota theory to examine the interaction effects of female board directors and their related strategies to target female customers as a source of female talent on the promotion numbers of female managers.

Design/methodology/approach

The authors draw from female manager panel data surveyed and gathered by the Korean Women Development Institute (KWDI), a Korean government-sponsored research institution, for the period 2008–2014. The total sample, comprising 5 biannual waves, includes 906 Korean companies across four wage rates. The authors apply zero-inflated negative binomial regression analyses to examine the effects of gender diversity on board director positions and its interactions with strategies targeting female markets on the number of female managerial promotions.

Findings

The authors find that gender diversity on boards of directors is positively related to the number of female managers promoted. Furthermore, in corporations where gender is not relevant to firms' strategy and decision-making, broader gender diversity increases the number of female managers promoted at lower- but not higher-level positions.

Originality/value

The current study demonstrates the complex role of gender diversity in board director positions in initiating and promoting the career development of female managers. On the one hand, gender diversity in board director positions has spillover effects on women's representation in management positions. On the other hand, female board directors impede the career progress of senior female managers to maintain their status in quotas when the female market is not critical to firms' competitiveness. Therefore, it is crucial to integrate two different concepts about gender diversity—the gender spillover effect and implicit quota theory—that elaborate on the effects of gender diversity in board director positions on female manager promotion numbers.

Details

Baltic Journal of Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5265

Keywords

Article
Publication date: 13 October 2022

Shubham Singhania, Jagvinder Singh and Deepti Aggrawal

This study aims to highlight the impact of introducing women directors to board committees, thereby empowering them to contribute to decision-making, and as a result…

Abstract

Purpose

This study aims to highlight the impact of introducing women directors to board committees, thereby empowering them to contribute to decision-making, and as a result, influence firms’ financial performance in an emerging economy.

Design/methodology/approach

This study uses a fixed-effects panel data regression model to test the impact of gender diversity on corporate boards as well as board committees on firms’ financial performance. Two widely used diversity measures, the Blau index and the Shannon index, have been used to enhance the robustness of the results.

Findings

The findings suggest that gender diversity on prominent board committees (remuneration committee and nomination committee) positively affects firms’ financial performance when measured by the market-based performance measure, but it is insignificant when measured through accounting-based performance indicator. Furthermore, the benefits of gender diversity accrue to the firms only when women are part of prominent committees and are engaged in governance mechanisms, rather than just being appointed on corporate boards as a means of tokenism.

Originality/value

This study is among the first to investigate the relationship between gender diversity and financial performance through the lens of committee assignments. Moreover, the unique cultural and institutional setting offered by India, which is an emerging economy, provides a fertile ground for understanding the role of women leaders in the workforce.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 11 April 2022

Moncef Guizani and Gaafar Abdalkrim

The purpose of this paper is to examine the impact of board gender diversity on firm financial distress for a sample of 367 non-financial firms listed on Bursa Malaysia…

Abstract

Purpose

The purpose of this paper is to examine the impact of board gender diversity on firm financial distress for a sample of 367 non-financial firms listed on Bursa Malaysia over the period from 2011 to 2019.

Design/methodology/approach

The study employs both panel logistic regression and dynamic generalized method of moments estimator to determine the impact of board gender diversity on the likelihood of financial distress. Altman Z-score model is used as a proxy for financial distress indicator. The bigger the Z-score, the smaller the risk of financial distress.

Findings

The results show that board gender diversity could help to improve board effectiveness by preventing corporations from being too exposed to financial distress and bankruptcy. In particular, whether they are independent or inside members, women directors are likely to reduce the likelihood of financial distress. The results also show that the effect of female directors on the likelihood of financial distress is strengthened through more board independence. The results are consistent with those in prior research that documents the benefits of board gender diversity.

Practical implications

This paper provides insights for corporate decision makers in emerging economies, helping them to determine the board's design in terms of roles and composition that promote governance practices and prevent financial troubles. Furthermore, the findings of this study may be useful regulators as they shed light on the importance to undertake measures and reforms to promote board effectiveness by the introduction of gender diversity. Finally, this study also offers implications for society in general, considering that the practice of enhancing board gender diversity can significantly safeguard the interest of a wide range of stakeholders by reducing the chances of corporate bankruptcy.

Originality/value

While prior research has examined the effect of board gender diversity on firm performance, this study is the first to investigate the effect of board gender diversity on the likelihood of financial distress in Malaysia.

Details

Asia-Pacific Journal of Business Administration, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-4323

Keywords

Article
Publication date: 30 June 2022

Kin Wai Lee and Tiong Yang Thong

This paper examines contextual factors that affect the association between board gender diversity and firm performance.

Abstract

Purpose

This paper examines contextual factors that affect the association between board gender diversity and firm performance.

Design/methodology/approach

The authors use a global sample of listed firms in the tourism industry in 30 countries from 2015 to 2020.

Findings

First, firm performance is positively associated with the proportion of female directors on a board. Second, the positive association between firm performance and the proportion of female directors on the board is higher in (1) countries with stronger shareholder rights, (2) countries with stronger securities law regulation stipulating disclosure of board diversity, (3) countries with stronger economic empowerment of women, and (4) during the COVID-19 crisis. Third, corporate financial distress risk is lower in firms with higher proportion of female directors on the board. Fourth, the negative association between corporate financial distress risk and the proportion of female directors on the board is more pronounced in (1) countries with stronger securities law regulations stipulating disclosure of board gender diversity, (2) countries with stronger economic empowerment of women, and (3) during the COVID-19 crisis.

Originality/value

The results indicate that contextual factors (comprising country-level corporate governance structures, economic empowerment of women and economic crisis) can affect the association between board gender diversity and firm performance.

Details

Equality, Diversity and Inclusion: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-7149

Keywords

Article
Publication date: 30 June 2022

Jagvinder Singh, Shubham Singhania and Deepti Aggrawal

This study aims to evaluate the impact of gender diversity on corporate boards on firms’ financial performance in the context of the Indian information and technology (IT…

Abstract

Purpose

This study aims to evaluate the impact of gender diversity on corporate boards on firms’ financial performance in the context of the Indian information and technology (IT) sector. The Companies Act 2013 brought forth mandatory provisions for the appointment of women directors for a certain class of companies. This study explores the case of board gender diversity in the Indian IT sector’s unique setting.

Design/methodology/approach

The study uses a fixed effect panel data regression model to achieve its objectives. Two widely used diversity measures, Blau Index and Shannon Index, have been used to enhance the robustness of the results.

Findings

The results of the study indicate an insignificant relationship between gender diversity and firms’ financial performance. Even the diversity indices portray insignificant results confirming the outcomes of the study. The study indicates that IT sector firms have not been able to leverage the benefits of board gender diversity.

Research limitations/implications

The results of the study have important policy implications for the government, regulatory bodies and corporates. The outcomes point out that the benefits that could have accrued based on the diversity aspect could not be harnessed, as the women’s representation on corporate boards is extremely low. Policymakers and government shall focus on devising stringent laws so that better representation of women directors can be used for the interests of the firms.

Originality/value

The study is an attempt to fill the gap in the extant literature which has a scarce number of studies conducted in the unique setting of the IT sector (both in developed and developing economies). To the best of the authors’ knowledge, this is the first study on the influence of board gender diversity in the IT sector of a developing economy, backed by socio-cultural reasons.

Details

Society and Business Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5680

Keywords

Article
Publication date: 2 March 2022

Zhongtian Li, Jing Jia and Larelle Chapple

This paper aims to uncover the global trend on the relationship between board gender diversity and firm risk. In addition, this paper investigates how country…

Abstract

Purpose

This paper aims to uncover the global trend on the relationship between board gender diversity and firm risk. In addition, this paper investigates how country characteristics affect the relationship between board gender diversity and firm risk.

Design/methodology/approach

This study uses a large sample of firms in 45 countries for the period from 2002 to 2018. Ordinary least square regression is used as a baseline methodology, along with firm fixed effects. Difference-in-differences regression, two-stage least squares regression (instrumental variables approach) and change-on-change regression are adopted to better mitigate endogeneity.

Findings

This study finds that board gender diversity is associated with lower firm risk worldwide. In addition, the negative effect of board gender diversity on firm risk is more pronounced for firms that can more easily attract female directors, and for countries with lower power distance and greater preference for individualism.

Practical implications

The findings offer insights into the intense debate in recent years among academics and practitioners on the effect of board gender diversity on firm outcomes. Shareholders and directors may take the findings into account when they consider appointing female directors. The findings should be of interest to policymakers in countries that have not yet promoted board gender diversity.

Originality/value

By using an international sample with board gender quotas in different countries, this paper provides novel and persuasive evidence regarding the impact of board gender diversity on firm risk. This paper also adds to the literature by showing that the relationship between board gender diversity on firm risk is influenced by country characteristics.

Details

Managerial Auditing Journal, vol. 37 no. 4
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 10 February 2022

Isaac Boadi, Raymond Dziwornu and Daniel Osarfo

The marginalization of women on boards is a heavily discussed topic across the world, especially in Ghana. Apart from estimating the link between boardroom gender diversity

Abstract

Purpose

The marginalization of women on boards is a heavily discussed topic across the world, especially in Ghana. Apart from estimating the link between boardroom gender diversity and technical efficiency of banks, this study aims to test the presence of upper echelons theory in the Ghanaian banking sector.

Design/methodology/approach

The study examines data from 2000 to 2019 annual reports of 23 banks in Ghana. The stochastic frontier analysis is used to estimate the impact of boardroom gender diversity on technical efficiency of banks in Ghana.

Findings

This study finds that greater boardroom gender diversity generates technical efficiencies for banks. The results remain unchanged after accounting for bank types (listed and non-listed). Thus, all banks benefit in terms of technical efficiency from more boardroom gender diversity. The upper echelons theory is validated in the Ghanaian banking context. Overall, the study supports pro-gender diversity on boards.

Practical implications

The results have implications at corporate, social and national levels. It supports the need for policies that improve greater boardroom gender diversity.

Originality/value

This study adds to a growing number of non-developed countries by investigating the link between the boardroom gender diversity and technical efficiency of banks in Ghana, a country which historically has had minimal female participation in the workforce. New insight is, therefore, offered into this relationship by using data which examines the technical efficiency of banks periods before and after the Women in Finance Charter in 2016.

Details

Corporate Governance: The International Journal of Business in Society, vol. 22 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 1 April 2022

Antonio Prencipe, Danilo Boffa, Armando Papa, Christian Corsi and Jens Mueller

The purpose of this study is to analyze the impact of human capital related to gender and nationality diversity in boards of directors on the innovation of university…

Abstract

Purpose

The purpose of this study is to analyze the impact of human capital related to gender and nationality diversity in boards of directors on the innovation of university spin-offs (USOs) in their entrepreneurial ecosystem. Following the intellectual capital (IC) framework and the resource dependence theory, upper echelons theory and critical mass theory, it hypothesizes that the relationship between board diversity and USOs’ firm innovation is non-linear.

Design/methodology/approach

To test the research hypotheses empirically, a sample of 827 Italian USOs over the period 2009–2018 was analyzed using zero-inflated Poisson regression modeling. A robustness test was also performed.

Findings

Gender obstacles remain in USOs’ entrepreneurial ecosystem, with little involvement of women in boards, and the benefits of human capital for firm innovation emerge with increased female representation. Nevertheless, a few foreign-born directors embody valued IC in terms of human capital from an internationally linked entrepreneurial ecosystem, which decreases with more foreign-born directors due to communication costs and coordination problems.

Research limitations/implications

The emerging non-linear relationships imply that gender- and nationality-diverse boards in USOs constitute critical human capital factors boosting the devolvement of entrepreneurial processes, in terms of firm innovation, in university entrepreneurial ecosystems.

Originality/value

This study contributes significantly to the move from traditional corporate governance analysis through an IC framework, fostering an understanding of the role of human capital and its diversity determinants in spurring firm innovation among USOs considering the university entrepreneurial ecosystem.

Details

Journal of Intellectual Capital, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 22 November 2021

Ge Ren and Ping Zeng

Drawing on the gender self-schema theory, upper echelons theory and the literature on international business, this study aims to examine the impact of board gender

Abstract

Purpose

Drawing on the gender self-schema theory, upper echelons theory and the literature on international business, this study aims to examine the impact of board gender diversity on firms' internationalization speed.

Design/methodology/approach

In this study, secondary data of 886 listed Chinese manufacturing firms from 2009 to 2018 are studied using the ordinary least squares regression model as the baseline method, an instrumental variable method is adopted for endogeneity control and both fixed and random effect models are adopted for the robustness test.

Findings

Board gender diversity reduces firms' internationalization speed, and the negative effect between board gender diversity and internationalization speed is stronger when the average age of female directors is older and weaker when female directors have international experience or financial background.

Practical implications

First, Chinese firms need to increase or decrease board gender diversity to match the board to firms' internationalization strategy. Increasing board gender diversity may be a more appropriate choice for firms that are expanding rapidly internationally, and vice versa. Second, when introducing female directors to international firms, it is essential to address other characteristics of these directors beyond their gender.

Originality/value

First, the authors contribute to the literature on board gender diversity using Chinese manufacturing firms as our research sample, which provides new insights into the economic consequences of increasing the number of female directors. Second, this research contributes to the literature on firms' internationalization speed. Third, the authors capture in more detail the economic consequences of increasing board gender diversity in the context of China.

Details

Baltic Journal of Management, vol. 17 no. 1
Type: Research Article
ISSN: 1746-5265

Keywords

Article
Publication date: 25 November 2021

Sourour Ben Saad and Lotfi Belkacem

The purpose of this paper is to investigate the indirect relationship between board gender diversity and capital structure decisions and to examine whether the capital…

Abstract

Purpose

The 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/approach

Based 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.

Findings

This 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/value

This 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.

Details

Corporate Governance: The International Journal of Business in Society, vol. 22 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

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