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Article
Publication date: 6 October 2021

Ayman Issa and Mohammad A.A. Zaid

Drawing on the multi-theoretical perspective, the primary purpose of this paper is to empirically investigate the inextricably entwined nexus between board gender diversity

Abstract

Purpose

Drawing 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/approach

Multiple 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.

Findings

The 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 implications

The 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/value

To 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.

Details

International Journal of Accounting & Information Management, vol. 29 no. 4
Type: Research Article
ISSN: 1834-7649

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Article
Publication date: 16 September 2021

Waqas Bin Khidmat, Muhammad Danish Habib, Sadia Awan and Kashif Raza

This study aims to examine the determinants of the female representations on Chinese listed firm’s boards. This study also investigates the effect of gender diversity on…

Abstract

Purpose

This study aims to examine the determinants of the female representations on Chinese listed firm’s boards. This study also investigates the effect of gender diversity on corporate social responsibility activities.

Design/methodology/approach

The Tobit regression model is used because the data is censored and using ordinary least square regression can give spurious results. For robust check, the authors also used Heckman’s (1979) two-stage self-selection model to remove the sample self-selection bias.

Findings

The authors find that the female representations on the corporate board are positively associated with firm age, firm performance, corporate governance, family ownership, institutional ownership and managerial ownership while negatively related to firm size and state ownership. This study also incorporates predictors of the critical mass of women on the Chinese listed firm’s board. The study also tests the female-led hypothesis and concludes that the female representation increases in firms with female chief executive officer (CEO) or female chairpersons. The Chinese listed firms with gender-diverse board are socially responsible.

Research limitations/implications

The importance of diversity in corporate boards has been demonstrated in light of the agency theory and the resource dependence framework. The results contribute to the previous literature by documenting the determinants of female representations on board, robust by alternative measures of gender diversity, firm size, corporate governance and estimation techniques.

Practical implications

The economic significance of gender diversity stirred the firms to increase female representation. The policymakers can understand the reasons for female underrepresentation in Chinese boards and can reform the regulation to enhance governance quality, non-state ownership and risk aversion among the listed firms.

Originality/value

This study contributes to the literature by providing empirical evidence on the key predictor of the world’s largest emerging economy, specifically the study focuses on the firm specific determinants, different governance attributes, ownership structure and firm risk measures. This study also seeks to answer if the presence of a female in the Chairperson or CEO position encourages the firms to hire more female directors or not?

Details

Management Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8269

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Article
Publication date: 24 September 2021

Rabiatu Kamil and Kingsley Opoku Appiah

This study aims to investigate the nexus between gender-diverse boards and cost of debt in the developing economies context. Specifically, the authors examine whether firm…

Abstract

Purpose

This study aims to investigate the nexus between gender-diverse boards and cost of debt in the developing economies context. Specifically, the authors examine whether firm size moderates the relationship between female board representation and cost of debt, regardless of the industry type.

Design/methodology/approach

The authors use panel data from 17 non-financial listed Ghanaian firms over the period 2007–2017, ordinary least square, two-stage least square and generalised method of moments estimations to test the hypothesis.

Findings

The authors find that board gender diversity is positively related to cost of debt. Further evidence suggests the interaction of firm size and board gender diversity displays a negative association with cost of debt.

Practical implications

The study evidence suggests larger non-manufacturing firms with gender-diverse boards attract lower cost of capital in an environment with lax enforcement of rules and regulations in corporate governance.

Social implications

Lenders consider the size and industry of firms in pricing debt. This has implications on UN Goal 5, highlighting that shareholders of larger non-manufacturing firms benefit immensely from board gender diversity in the context of debt.

Originality/value

The authors contribute to the board gender diversity and cost of debt literature by demonstrating that firm size and industry type matter in the developing economies context.

Details

Gender in Management: An International Journal , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-2413

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Article
Publication date: 16 August 2021

Moncef Guizani and Gaafar Abdalkrim

This 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

Abstract

Purpose

This 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/approach

This study applies a three-stage least squares regression analysis for a sample of 367 Malaysian listed firms over the period 2011–2019.

Findings

The 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 implications

The 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/value

While 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.

Details

Management Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8269

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Article
Publication date: 13 August 2021

John P. Berns and Jaime L. Williams

While the presence of women in the boardroom has been steadily increasing, shareholders have taken action to push firms which lag in this area to add women to their boards

Abstract

Purpose

While the presence of women in the boardroom has been steadily increasing, shareholders have taken action to push firms which lag in this area to add women to their boards. The purpose of this study is to examine whether firms with more gender homogenous (i.e. male-dominated) boards are disproportionately targeted with shareholder proposals calling for increased board gender diversity, how gender diversity among other firm leadership moderates this relationship, and whether firms respond.

Design/methodology/approach

Firth logistic regression is used to analyze the rare occurrence of a shareholder proposal within a sample of 7,226 firm year observations from S&P 1,500 firms in the USA between 2010 and 2017. Ordinary least squares regression is used to examine the subsequent three-year change in board gender diversity using a sample of 3,917 firm year observations.

Findings

The empirical findings indicate that firms with gender homogenous boards are more likely to incur shareholder proposals aimed at increasing board gender diversity. Having women in leadership positions (e.g. as the Chief Executive Officer) weakens this relationship. Finally, despite most proposals failing to pass, board gender diversity dramatically increases following the rendering of a proposal.

Originality/value

This study adds to the understanding of the principal-agent relationship, offering novel insights into shareholder responses to the lack of gender diversity among the board and firm responses to such activism. Furthermore, the authors add to the understanding of expectation violations with regard to gender diversity within firm boards. Finally, the authors find that women in other leadership positions insulate the firm from such shareholder activism – an important boundary condition of the findings.

Details

Gender in Management: An International Journal , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-2413

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Article
Publication date: 28 July 2021

Santi Gopal Maji and Rupjyoti Saha

This paper aims to examine the impact of gender diversity both at operational and leadership levels on the financial performance of firms in India.

Abstract

Purpose

This paper aims to examine the impact of gender diversity both at operational and leadership levels on the financial performance of firms in India.

Design/methodology/approach

The study is based on a panel data set of 100 large Indian corporate firms. This study uses the Blau index and Shannon index to compute gender diversity. First, this paper uses system generalized method of moments model to deal with the potential endogeneity issue in the association between gender diversity and firm performance. Second, to unveil heterogeneity in such a relationship, the study applies panel data quantile regression model. Finally, the study adopts a generalized estimating equation model to investigate such relationships for group affiliated and standalone firms.

Findings

This study finds a significant positive impact of workforce gender diversity and board gender diversity on the financial performance of firms. Further, the results of the quantile regression model indicate that the impact of gender diversity (workforce and board) on firm performance is more pronounced at higher quantiles of the conditional distribution of firm performance. However, the study fails to extricate any significant impact of audit committee gender diversity on firm performance. Finally, the study also finds a significant positive impact of gender diversity at both workforce and board level for a group affiliated, as well as standalone firms.

Originality/value

The present study makes a novel contribution to the extant literature on the association between gender diversity and financial performance of firms by examining such diversity at both operational and leadership levels in the context of an emerging country such as India that captures the complex realities pertaining to gender issues. Further, the study contributes to the empirical literature regarding the heterogeneous impact of gender diversity on firm performance in the Indian context.

Details

Management Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8269

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Article
Publication date: 28 August 2021

Ridhima Saggar, Nischay Arora and Balwinder Singh

The study aims to pervade the gap in the domain of risk disclosure and gender diversity, which is comparatively uncharted. Gender diversity being a crucial element of…

Abstract

Purpose

The study aims to pervade the gap in the domain of risk disclosure and gender diversity, which is comparatively uncharted. Gender diversity being a crucial element of corporate governance can deepen understanding on the issue in the backdrop of a developing country such as India, so this study aims to investigate the relationship between gender diversity on board and corporate risk disclosure.

Design/methodology/approach

Four measures of gender diversity, i.e. BLAU index, SHANNON index, proportion of women directors on board and female dummies, have been deployed to measure gender diversity. The empirical analysis is premised on a sample of S&P BSE 100 index pertaining to the 2018–2019 financial year; which eventually gets reduced to 70 non-financial firms after eliminating 30 financial firms. To examine the impact of gender diversity on corporate risk disclosure, hierarchical regression has been used. Additionally, two-stage least square regression analysis has been performed for checking the endogeneity issues in data and validating the findings of the study.

Findings

The main findings unveil that gender diversity positively impacts corporate risk disclosure. Confirming the agency theory and resource dependency theory, its alternative measures like BLAU index, SHANNON index, proportion of women directors and female dummy divulged to positively impact corporate risk disclosure. When women dummy has been used, analysis unmasked that firms electing more than one female director on board has a higher positive impact on corporate risk disclosure as compared to firms engaging only one women director on board.

Research limitations/implications

The study is undertaken in the Indian settings, which has its own set of legislative laws, whereas there is need to reaffirm the relationship applying cross-country analysis. Furthermore, there is huge hollowness in the domain of gender diversity and risk disclosure that calls for empirical evidence to unearth futuristic vision.

Practical implications

The research presents managerial implications for the managers to promote gender egalitarianism by electing higher quantum of women directors on board to achieve global standards of maintaining higher risk disclosure. Adequate risk disclosure on a gender-diverse board further assures the investors that their interest will remain intact in the organization that meets legal requirements by embracing gender equality in employment. A woman in the boardrooms incarnates transparency through divulgence of risk information, which suffices the informational needs of investors. In addition, the findings insists the regulators towards staunch enforcement of effective corporate governance practice through increasing the proportion of women directors on board as they assist in dispelling risk disclosure, which will avert sceptical ambitions of managers and deconstruct their stereotype attitude towards women.

Originality/value

This study is a novel contribution in expanding the risk disclosure literature by analyzing the unexplored impact of gender diversity on the extent of corporate risk disclosures in India.

Details

Gender in Management: An International Journal , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-2413

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Article
Publication date: 16 August 2021

Seksak Jumreornvong, Sirimon Treepong karuna, Shenghui Tong and Pornsit Jiraporn

This paper aims to explore the effect of economic policy uncertainty (EPU) on board gender diversity. Prior research shows that female directors play a beneficial role…

Abstract

Purpose

This paper aims to explore the effect of economic policy uncertainty (EPU) on board gender diversity. Prior research shows that female directors play a beneficial role. The advantage of board gender diversity should be particularly helpful when firms have to navigate an uncertain environment. So the authors hypothesize that firms adjust their board gender diversity in response to EPU.

Design/methodology/approach

The authors execute a regression analysis. To minimize endogeneity, the authors execute firm-fixed effects regressions, an instrumental variable (IV) analysis and propensity score matching.

Findings

Consistent with their hypothesis, the authors find that firms significantly raise board gender diversity in response to EPU. To draw a causal inference, the authors exploit the 9/11 terrorist attack as an exogenous shock that elevated EPU unexpectedly. The authors’ IV analysis corroborates the results. Finally, the authors show that board gender diversity substantially mitigates the adverse effect on shareholder wealth brought about by an unanticipated negative shock attributed to the 9/11 attack.

Originality/value

According to the authors’ knowledge, this study is the first to investigate the effect of EPU on board gender diversity. This research contributes to two important areas of the literature, i.e. board gender diversity and EPU. The authors show that board gender diversity is beneficial and firms act accordingly when facing more economic uncertainty.

Details

Accounting Research Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1030-9616

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Article
Publication date: 15 July 2021

Moncef Guizani and Ahdi Noomen Ajmi

This study aims to explore the role of board gender diversity in mitigating chief executive officer (CEO) luck. CEOs are “lucky” when they receive stock option grants on…

Abstract

Purpose

This study aims to explore the role of board gender diversity in mitigating chief executive officer (CEO) luck. CEOs are “lucky” when they receive stock option grants on days when the stock price is the lowest in the month of the grant, implying opportunistic timing.

Design/methodology/approach

This study uses a logistic regression analysis and an instrumental-variable analysis. The sample consists of 3,249 firm-year observations from 2010 through 2015.

Findings

The results show that female directors significantly deter the opportunistic timing of option grants. This study finds that gender diversity – as measured by the percentage of women on the board, the percentage of female independent directors and the percentage of female directors on the compensation committee are likely to reduce the odds that CEOs receive opportunistically timed lucky grants. The results are consistent with those in prior research that documents the benefits of board gender diversity.

Practical implications

The research findings are beneficial to policymakers and regulators, as it allows them to assess the importance of diversity on boards in the monitoring of the managers, particularly as it pertains to the design of CEO compensation packages. Furthermore, these findings have implications for Ibero-American countries as they shed light on the importance to undertake measures and reforms to promote board effectiveness by the introduction of gender diversity.

Originality/value

While prior research has examined the effect of board gender diversity on firm performance, the study is the first to investigate the effect of female directors on the opportunistic timing of option grants, using a rigorous empirical framework that explicitly accounts for endogeneity.

Resumen

Propósito

Este estudio busca explorar el papel de la diversidad de género en la junta directiva para mitigar la suerte del CEO. Los directores ejecutivos tienen “suerte” cuando reciben subvenciones de opciones sobre acciones en los días en que el precio de las acciones es el más bajo en el mes de la subvención, lo que implica un momento oportunista.

Diseño/Metodología

Empleamos un análisis de regresión logística, así como un análisis de variables instrumentales (IV). La muestra consta de 3249 observaciones de las firmas desde 2010 hasta 2015.

Hallazgos

Nuestros resultados muestran que las directoras disuaden significativamente el momento oportunista de la concesión de opciones. Descubrimos que la diversidad de género, medida por el porcentaje de mujeres en la junta directiva, el porcentaje de directoras independientes y el porcentaje de directoras en el comité de compensación probablemente reduzcan las probabilidades de que los directores ejecutivos reciban subvenciones afortunadas en el momento oportuno. Nuestros resultados son consistentes con los de investigaciones anteriores que documentan los beneficios de la diversidad de género en la junta.

Implicaciones practices

Los resultados de la investigación son relevantes para los responsables de la formulación de políticas y los reguladores, ya que les permite evaluar la importancia de la diversidad en los directorios en el seguimiento de los gerentes, particularmente en lo que respecta al diseño de paquetes de compensación de los directores ejecutivos. Además, estos hallazgos tienen implicaciones para los países iberoamericanos, ya que arrojan luz sobre la importancia de emprender medidas y reformas para promover la efectividad de los directorios mediante la introducción de la diversidad de género.

Originalidad

Si bien investigaciones anteriores han examinado el efecto de la diversidad de género de la junta en el desempeño de la empresa, nuestro estudio es el primero en investigar el efecto de las directoras en el momento oportunista de las concesiones de opciones, utilizando un marco empírico riguroso que explica explícitamente la endogeneidad.

Resumo

Objetivo

Este estudo busca explorar o papel da diversidade de gênero no conselho de administração para mitigar o destino do CEO. Os CEOs têm “sorte” de receber opções de compra de ações nos dias em que o preço das ações é mais baixo no mês de concessão, o que é um momento oportunista.

Desenho/Metodologia

Foi utilizada uma análise de regressão logística, bem como uma análise de variáveis instrumentais (IV). A amostra é composta por 3.249 observações de empresas de 2010 a 2015.

Conclusões

Nossos resultados mostram que as diretoras inibem significativamente o momento oportunista de outorga de opções. Descobrimos que a diversidade de gênero, medida pela porcentagem de mulheres no conselho de administração, a porcentagem de conselheiros independentes e a porcentagem de diretoras no comitê de remuneração, provavelmente reduz as chances de CEOs receberem subsídios da sorte em tempo hábil. Nossos resultados são consistentes com pesquisas anteriores que documentam os benefícios da diversidade de gênero no conselho.

Implicações práticas

Os resultados da pesquisa são relevantes para os formuladores de políticas e reguladores, pois permitem que avaliem a importância da diversidade nos conselhos na gestão de gerentes, especialmente no que se refere ao desenho de políticas. Além disso, esses achados têm implicações para os países ibero-americanos, uma vez que lançam luz sobre a importância de empreender medidas e reformas para promover a eficácia dos conselhos por meio da introdução da diversidade de gênero.

Originalidade

embora a evidência científica prévia tenha examinado o efeito da diversidade de gênero do conselho no desempenho da empresa, nosso estudo é o primeiro a investigar o efeito das diretoras no momento oportunista de concessões de opções, usando uma estrutura empírica rigorosa que explica explicitamente a endogeneidade.

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Article
Publication date: 8 March 2021

Pattanaporn Chatjuthamard, Pornsit Jiraporn, Sang Mook Lee, Ali Uyar and Merve Kilic

Theory suggests that the market for corporate control, which constitutes an important external governance mechanism, may substitute for internal governance. Consistent…

Abstract

Purpose

Theory suggests that the market for corporate control, which constitutes an important external governance mechanism, may substitute for internal governance. Consistent with this notion, using a novel measure of takeover vulnerability primarily based on state legislation, this paper aims to investigate the effect of the takeover market on board characteristics with special emphasis on board gender diversity.

Design/methodology/approach

This paper exploits a novel measure of takeover vulnerability based on state legislation. This novel measure is likely exogenous as the legislation was imposed from outside the firm. By using an exogenous measure, the analysis is less vulnerable to endogeneity and is thus more likely to show a causal effect.

Findings

The results show that a more active takeover market leads to lower board gender diversity. Specifically, a rise in takeover vulnerability by one standard deviation results in a decline in board gender diversity by 10.01%. Moreover, stronger takeover market susceptibility also brings about larger board size and less board independence, corroborating the substitution effect. Additional analysis confirms the results, including propensity score matching, generalized method of moments dynamic panel data analysis and instrumental variable analysis.

Originality/value

The study is the first to explore the effect of the takeover market on board gender diversity. Unlike most of the previous research in this area, which suffers from endogeneity, this paper uses a novel measure of takeover vulnerability that is probably exogenous. The results are thus much more likely to demonstrate causality.

Details

Corporate Governance: The International Journal of Business in Society, vol. 21 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

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