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In contrast to prior research on female directors’ participation, this study focuses on female directors playing a monitoring role within boardrooms. In addition, the current study investigates whether these female directors freeride from other strong governance mechanisms in place. Based on a sample of US firms, we document that female directors fulfilling monitoring responsibilities play a crucial role in protecting shareholders’ interests in both weak and strong corporate governance settings. In addition, interestingly, our results suggest that female directors, particularly monitoring female directors, significantly mitigate earnings management in firms audited by Big-4 and non-Big-4 auditors although their impact seems to be more prominent within non-Big-4 audit firms. That is, it seems that these directors are more likely to scrutinize managers closely when they feel that shareholders are at risk of being subjected to deception due to opportunistic practices by managers (i.e. when managers deliberately choose relatively low-quality auditors to audit corporate financial reports).

AbstractUsing a sample of 3.808 non-financial European Union listed companies from 2011 to 2020, this study extends previous research by empirically examining how board gender diversity affects the magnitude of earnings management. The results support the predicted (negative) relationship between female directors and earnings management. We also find that when a critical mass of three or more female directors is reached, they can have a voice, which can have a positive impact on earnings quality (less earnings management). The results based on this study offer useful information for regulators in European Union countries. The results also provide useful information to investors in evaluating the impact of board gender diversity on earnings quality. The major contribution of the current study is that in contrast to similar studies, we also present our evidence by country. In addition, we test the critical mass hypothesis to evaluate the ability of female directors to impact earnings management based on their numerical representation on the board of directors, an issue that has drawn reduced attention from empirical studies.

AbstractGender diversity on corporate boards is an important governance issue. Prior research suggests that female directors tend to be more ethical, conservative, socially responsible, independent and risk averse. Thus, female directors may contribute to improve board performance and earnings quality. Using a sample of 3.808 non-financial European Union listed companies from 2011 to 2020, this study examines the effect of female directors on accounting conservatism in European Union listed firms, and whether their influence is more evident when a critical mass of female directors is reached. The study also investigates whether gender equality index moderates the relationship between female directors and accounting conservatism. We document a positive and significant relationship between female directors and accounting conservatism. Firms that have reached a critical mass of female directors on their board tend to report more conservative earnings compared to firms with a ratio of female directors less than a critical mass. This study further suggests that the impact of female directors on accounting conservatism is stronger in the presence of a higher gender equality index. The results of this study may contribute to the ongoing debate on the optimal level of gender diversity in corporate governance and its impact on financial reporting practices.

AbstractThe effects of board gender diversity (BGD) on financial stability of financial institutions have long been an important topic, creating a rich strand of literature that focuses extensively on banks. Meanwhile, little is known about the implications of BGD on risk in microfinance institutions (MFI). This study aims to fill this gap. Using a data sample retrieved from the MIX Market database spanning the 2009–2018 period and the random-effects estimator, we find that the proportion of female directors on the board is positively associated with financial stability of MFIs measured by the Z-score. The result is robust when using alternative measures of financial stability and BGD, and alternative estimation techniques. In addition, we document a negative relationship between BGD and risk-taking behavior of MFIs. Further, the research result favors the critical mass theory rather than tokenism. Lastly, we find that BGD links with financial stability in a monotonic instead of non-monotonic manner.

The study explores the relationship between gender diversity board (GDB) and earnings management (EM) with state-ownership (SOE) and firm growth as moderating factors. Based on the data of 404 Vietnamese listed firms in 2015–2019, the feasible generalized least squares (FGLS) method and further tests are employed to confirm the results. Furthermore, this research compares the results of multiple regression analysis (MRA) with a recently developed panel data fuzzy-set qualitative comparative analysis technique (fsQCA). The findings suggest that women on board (WOB) is negatively related to accrual based earnings management (AEM), while positive relationships are found with the real earnings management (REM) one. Besides, firms have high proportion of SOE reduce the monitoring role of WOB in detering EM. For companies that had the increase in revenue, WOB shows a positive and insignificant relationship to AEM as well as REM, respectively. The fsQCA results highlight the configuration of WOB, SOE, FG, and other board characteristic proxies that lead to the EM’s behavior. In short, the moderating role of SOE and revenue expansion is validated. This study adds to the scholarly literature on accounting and corporate governance (CG) by providing empirical evidence from the context of an emerging market, Vietnam.

This study examines the relationship between corporate social responsibility (CSR) reporting, board gender diversity (BGEND) and real earnings management (REM). It also investigates how the relationship between CSR reporting and REM differs between gender-diverse and non-diverse firms. Content analysis was used to measure CSR reporting. The ordinary least square regression is used to examine the relationships for a sample of 475 firm-year observations listed on the Amman Stock Exchange during 2011–2016. The results show that CSR reporting is significantly and negatively associated with REM in the Jordanian market. Nevertheless, BGEND is negatively and significantly related to REM. More importantly, the results show that BGEND moderates the CSR-REM relationship. Further, when the sample is split into board gender-diverse and non-diverse firms, the CSR-REM significant negative relationship is evident only in the former, corroborating the moderating role of the BGEND in Jordan. This study contributes to the literature on CSR, BGEND, and REM by offering evidence for the moderating role of BGEND on the CSR-REM relationship, supporting the view that females are more sensitive to ethics. Regulators and stakeholders should be aware of the potential effect of engagement in CSR reporting and the benefits of having a gender-diverse board on financial reporting quality.

This paper examines the advancement of literature on gender diversity on corporate boards (board gender diversity). We discuss important management theories cited in the literature and examine the factors that affect board gender diversity. We present evidence from developed and emerging markets based on a review of studies to show how board gender diversity impacts a firm performance. We also review growing literature on the gender quota legislation that mandates the appointment of female director(s) on corporate boards. Research on board gender diversity reveals director characteristics, firm size, board size, board diversity, industry, type of ownership, customer base, and social and cultural characteristics as the factors that influence representation of female directors on corporate boards. Studies on the impact of board gender diversity on firm performance present inconclusive results. In a similar vein, studies on the impact of gender quota legislation on firm performance also present mixed results. Our study contributes to the growing literature on board gender diversity and provides a further understanding of factors that influence gender diversity on corporate boards. It also offers insights to regulators on potential limitations and the benefits of gender quota legislation.

This study examines the impact of the women existence on corporate board. It is believed that the existence of women on board adds more value to the company as more women bring different perspectives on the decision-making process and the company’s strategic plans. Using Islamic listed-firms in the Indonesian Stock exchange, this study employs 7-year panel data comprising 840 observations from 2009 to 2015 quarterly data of 30 listed-firms that comply with Islamic law. Generalized Least Square is employed in this study and the results revealed that the presence of female CEOs has lowered the firm’s risk for all risk proxies. Female CEOs having a higher academic qualification, overseas qualification, and business degree tends to lower the firm’s risk. The result also indicates that the younger the age of female CEOs and the longer tenure of the female CEOs, the lower the firm’s risk. Furthermore, more female directors on boardroom have a significant impact on firm’s risk as the higher the number of female directors the lower the firm’s risk (CR and FCF). In addition, female chief financial officer tends to lower the firm’s risk as they are believed to be more conservative in dealing with the financial issues.