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Book part
Publication date: 7 May 2019

Carolina Herrera-Cano and Maria Alejandra Gonzalez-Perez

This chapter aims to evaluate the relationship between the representation of women on corporate boards of directors and its impact on firm financial performance.

Abstract

Purpose

This chapter aims to evaluate the relationship between the representation of women on corporate boards of directors and its impact on firm financial performance.

Design/Methodology/Approach

This study utilized both a systematic review and a meta-analysis, using a sample of 40 published studies, which gleaned financial indicator and observation data from 28 different countries.

Findings

As indicated in previous studies, while positive, there was no significant correlation found between the number of women serving on the boards of directors and firm financial performance.

Research Limitations/Implications

The heterogeneity between the various studies analyzed may present difficulties in making general conclusions. The chapter could also be subject to publication bias, as the selection criteria included may indicate a need for further peer review. Future meta-analyses should include data associated with other financial indicators.

Practical Implications

This study shows how composition ratios of men/women serving on corporate boards should be addressed in terms of proving for a greater diversity of leadership perspectives.

Originality/Value

Previous systematic reviews and meta-analyses have analyzed country environments as moderators for the relationship between the representation of women on corporate boards and firm financial performance. The present study evaluates possible differences between the impact of the number of women serving on the board of directors on a variety of financial indicators (ROA, ROE, and Tobin’s Q).

Article
Publication date: 11 September 2018

Bazeet Olayemi Badru, Nurwati A. Ahmad-Zaluki and Wan Nordin Wan-Hussin

The purpose of this paper is to examine whether the differences in men and women, such as risk aversion in decision making, can influence the amount of capital that the…

Abstract

Purpose

The purpose of this paper is to examine whether the differences in men and women, such as risk aversion in decision making, can influence the amount of capital that the board of directors can allocate for investment opportunities.

Design/methodology/approach

This study sampled 212 IPOs over the period of 2005–2015 and employed the OLS and the quantile regression techniques to examine the impact of female directors on capital allocation.

Findings

The results show that women on corporate boards have a positive influence on the amount of capital an IPO company can allocate for investment opportunities. These findings suggest that the investment strategies of women in an emerging financial market, like Malaysia, may differ from women in other financial markets.

Practical implications

The presence of women on corporate boards plays an important role in board involvement in a company’s strategic decision at the time of the IPO. Therefore, regulators and IPO issuers should pay close attention to the corporate governance structure of a company at the time of an IPO. In addition, investors and other stakeholders of a company may consider women on corporate boards as an important factor in financing and investment decisions.

Originality/value

Despite several studies that have examined the influence of women on corporate boards on corporate outcomes, globally, the presence of women on corporate boards and their influence on corporate decision-making related to allocation of capital to investment opportunities, have not been fully explored in the IPO literature.

Details

Management Decision, vol. 57 no. 3
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 1 June 1993

Ronald J. Burke

Increasing research attention has been devoted to understanding the roles and responsibilities of boards of directors of North American corporations (Gillies, 1992; Lorsch…

Abstract

Increasing research attention has been devoted to understanding the roles and responsibilities of boards of directors of North American corporations (Gillies, 1992; Lorsch & Maclver, 1989; Fleischer, Hazard & Klipper, 1988). This has resulted, in part, from increased interest in corporate governance. Scholars continue to explore and debate the question of who controls and is responsible for the activities and performance of corporations in a democratic society (Vance, 1983; Worthy & Neushel, 1982). In addition, the veil of privacy that had historically been accorded CEOs and board members is slowly being lifted. As a result, information about the membership and working of corporate boards of directors is starting to accumulate (Gillies, 1992). Corporate boards of directors also came under increased scrutiny and criticism during the 1980s because of specific decisions made by them (e.g. hostile takeovers, mergers and acquisitions, golden parachutes, excessive levels of executive compensation) and the generally low performance levels of North American organisations in the international marketplace. The latter has resulted in several suggestions for improving the effectiveness of corporate boards (Barrett, 1993; Patton & Baker, 1987; Salmon, 1993; Leighton & Thain, 1993). Suggestions have included the separation of the CEO/Board chairman roles, improved selection of directors, training of directors, clarifying roles and responsibilities of directors (and CEOs), and replacing directors who are not performing well.

Details

Equal Opportunities International, vol. 12 no. 6
Type: Research Article
ISSN: 0261-0159

Article
Publication date: 10 April 2018

Varnita Srivastava, Niladri Das and Jamini Kanta Pattanayak

The purpose of this paper is to examine the significance of gender diversity on corporate boards in India in the light of recent regulatory reform introduced in the…

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Abstract

Purpose

The purpose of this paper is to examine the significance of gender diversity on corporate boards in India in the light of recent regulatory reform introduced in the Companies’ Act, 2013 which mandated the presence of at least one woman on the corporate boards of all the listed firms.

Design/methodology/approach

Based on a panel of 300 firm-year observations for 15 years from 2001 to 2015, regression analysis has been conducted to analyze the relation between gender-related variables of corporate boards with firm-specific financial characteristic, cost of equity (COE) and return on assets (ROA) of firms listed in CNX Nifty, a major financial market index of India.

Findings

The analysis indicates that boards with gender diversity explain a slightly more than 5.5 percent change in a firm’s COE and have a much higher impact of 45 percent on a firm’s ROA. The presence of female directors on the boards and their independence have a negative association with the COE, whereas the level of involvement of female directors on different committees has a positive association with the ROA.

Practical implications

The findings may help theorists in defining the right mix of female on the corporate boards in an emerging economy. Also, by taking input from the findings, regulators and industry can formulate policies to foster gender diversity on corporate boards in India.

Originality/value

This study considers the recent regulatory norm introduced in India. This issue has still not been discussed and analyzed by researchers in India. It attempts to explain the impact a gender diverse board can make on a firm’s performance. It also makes valuable recommendations to improve the norms intended to more effectively foster gender diversity on corporate boards in India.

Details

Management Decision, vol. 56 no. 8
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 5 June 2017

Sven Horak and Jingjing Cui

Recent legislation in Europe and North America encourages women’s participation in corporate boards based on the belief that gender-diversified boards contribute…

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Abstract

Purpose

Recent legislation in Europe and North America encourages women’s participation in corporate boards based on the belief that gender-diversified boards contribute positively to firm performance and increased competitiveness. Contrary to the West, the women’s participation rate in business has been traditionally high in China. The purpose of this paper is to find out whether gender-diverse corporate boards of Chinese automotive firms perform better financially than gender-homogeneous boards.

Design/methodology/approach

By drawing on data from the Chinese Government and Bloomberg, the authors compare and analyze the differences in financial performance (return on equity, asset growth, sales growth) and risk behavior (debt risk, R&D expenditure) of Chinese automotive firms with and without women on their corporate board.

Findings

There is significant evidence that firms with women on the board perform better across all three categories, with the exception of return on equity, for which they found no significant differences among the analyzed firms.

Practical implications

While women’s participation in corporate boards in China is low, the results of this study suggest to policy makers and firms alike to implement measures that support gender-diversified boards in order to take advantage of their potential to increase corporate performance.

Originality/value

So far, the performance of corporate boards of countries with a traditionally high share of female participation in the workforce has rarely been analyzed. Research focusing on the Chinese automotive industry is new and underrepresented, although China is the largest automotive market worldwide and a key industry of the domestic economy. This investigation contributes to the literature stream on board diversity in as well as to industry-related studies. With the example of the Chinese automotive industry, it provides empirical evidence of better performance of firms with gender-diversified boards within the categories tested.

Details

Personnel Review, vol. 46 no. 4
Type: Research Article
ISSN: 0048-3486

Keywords

Article
Publication date: 1 September 1994

Ronald J. Burke

Highlights the historical set‐up of Canadian boards of directors, whyand how women were first appointed to corporate boards. Examines factorsrelated to women serving on

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Abstract

Highlights the historical set‐up of Canadian boards of directors, why and how women were first appointed to corporate boards. Examines factors related to women serving on corporate boards, detailing advantages and barriers to the appointments. Reports on a survey of Canadian Chief Executive Officers (CEOs) which considers factors related to the appointment of women to corporate boards. Results indicated the CEOs′ opinions on, for example, how important a variety of qualifications is to the appointment of female directors; the women with difficulties in finding women with these qualifications; preferred candidate profiles; issues which would benefit from a female perspective; effects of women on boards and companies; and the question of why there are not more women directors. Finally, with the survey as a background, looks at why there are so few women on the boards of directors of Canadian private sector organizations; and the future prospects of women as board members.

Details

Women in Management Review, vol. 9 no. 5
Type: Research Article
ISSN: 0964-9425

Keywords

Book part
Publication date: 10 June 2021

Donnalyn Pompper, Tugce Ertem Eray, Eric Kwame Adae, Elinam Amevor, Layire Diop and Samantha Nadel

We enjoin stakeholder theory, radical-cultural feminist theory, and critical race theory with critical intersectionality to critique findings which suggest that there…

Abstract

We enjoin stakeholder theory, radical-cultural feminist theory, and critical race theory with critical intersectionality to critique findings which suggest that there still are significantly more men than women on nearly every Fortune 500 board of directors, with only six corporations featuring (50-50%) gender equity in 2017. Also, only 4.1% board members are women of color and 9% are men of color. Sixty-five people of color on corporate boards serve on more than one board. This means there are even fewer people of color filling top corporate leadership positions than meets the eye. The proposed alternative course of action is for boards of directors to follow the example of the small handful of peer Fortune 500 corporations that have achieved greater levels of board diversity, equity, and inclusion.

Details

Public Relations for Social Responsibility
Type: Book
ISBN: 978-1-80043-168-3

Keywords

Article
Publication date: 5 October 2015

Renuka Hodigere and Diana Bilimoria

The purpose of this study is to examine the importance of human capital and professional networks for women’s and men’s appointment to the boards of directors of public…

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Abstract

Purpose

The purpose of this study is to examine the importance of human capital and professional networks for women’s and men’s appointment to the boards of directors of public companies. The study provides an in-depth analysis of how human capital and professional networks contribute to women’s as compared with men’s odds of corporate board membership.

Design/methodology/approach

The study analyzes the human capital and professional networks of 494 male and female corporate outside (non-executive) directors appointed between 2005 and 2010 to the boards of US public companies listed in the Standard & Poor’s 500 index. Human capital was measured as director age, education and professional experience (function and role). Professional network variables measured included composition of professional network, network centrality, constraint and cohesion.

Findings

The study’s findings reveal that the characteristics that impact the appointment of women as outside directors to public company boards differ from those of men. Relative to men, certain professions such as government relations and education improve the odds of appointment of women to corporate boards, while age lowers women’s odds. The number of network ties and the degree of network cohesion were also significant in predicting the likelihood of female board appointment to public corporations relative to men’s odds. The final model was able to predict female board membership correctly only in 28 per cent of the cases, while male board membership was predicted in 89 per cent of the cases, suggesting that factors other than human capital and professional networks (e.g. their gender) impact women’s appointment to corporate boards.

Originality/value

To the authors ' knowledge, this study is the first to comprehensively examine the professional network components of female and male directors along with their human capital in the analysis of their prospects for board appointment. The conceptualization of professional networks as well the depth of quantitative analysis of the network components of the study advance the extant literature on the composition of corporate boards.

Details

Gender in Management: An International Journal, vol. 30 no. 7
Type: Research Article
ISSN: 1754-2413

Keywords

Article
Publication date: 4 February 2014

Alison Sheridan, Anne Ross-Smith and Linley Lord

– The purpose of this paper is to interrogate changes to women's representation on boards from an institutional perspective in a particular national context (Australia).

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Abstract

Purpose

The purpose of this paper is to interrogate changes to women's representation on boards from an institutional perspective in a particular national context (Australia).

Design/methodology/approach

Drawing on institutional theory at the legal, political and social levels the paper identifies the factors through which women's underrepresentation on corporate boards in Australia gained traction over the period 2009-2012.

Findings

Through the analysis of the Australian context over the period 2009-2012, the paper proposes a framework to represent the multiple, differentiated and often conflicting spheres affecting women's representation on boards and how this may have wider application internationally.

Research limitations/implications

In focusing on the institutional factors, the paper does not mean to underplay organisational factors relevant to women's access to board positions; rather the authors seek to draw attention to how the organisational factors may be shaped by changing institutional “rules”. From the interrogation of the conditions under which women's underrepresentation on corporate boards in Australia gained traction, the paper provides a conceptual foundation for the emerging study of institutions and women's representation on corporate boards internationally.

Practical implications

The purpose of documenting these institutional changes in Australia is to be instructive to others addressing the practical problem of how to increase women's representation on boards and what institutional factors may need to be considered to prompt change.

Originality/value

The conceptual framework adds to the as yet relatively under-theorised field of women on corporate boards.

Details

Equality, Diversity and Inclusion: An International Journal, vol. 33 no. 2
Type: Research Article
ISSN: 2040-7149

Keywords

Article
Publication date: 3 September 2018

Ammad Ahmed, Helen Higgs, Chew Ng and Deborah Anne Delaney

This paper aims to investigate the determinants of women representation on Australian corporate boards under the ASX’s “if not, why not” corporate governance framework. It…

Abstract

Purpose

This paper aims to investigate the determinants of women representation on Australian corporate boards under the ASX’s “if not, why not” corporate governance framework. It further aims to improve the study of Geiger and Marlin (2012) by using a theoretically sound two-limit Tobit model to examine the determinants.

Design/methodology/approach

This study uses the two-limit Tobit model to examine the determinants of women representation on ASX 500 boards. This approach is used due to the censored nature of the dependent variable.

Findings

This study finds that the two-limit Tobit model is an appropriate methodology to accommodate the censored dependent variable. It further finds that firm size, women as chair of boards, corporate governance index, Global Reporting Initiative signatory, debt ratio, average board age, BIG4 auditors, chief executive officer tenure and shareholder concentration are major determinants of women on boards.

Research limitations/implications

The use of only ASX 500 companies and the sample years (2011-2014) may limit the generalisation of the findings.

Originality/value

This is the first extensive longitudinal Australian study to examine the drivers of women representation on corporate boards. It is also the first of its kind to use the two-limit Tobit model to consider these determinants.

Details

Accounting Research Journal, vol. 31 no. 3
Type: Research Article
ISSN: 1030-9616

Keywords

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