When do investors value board gender diversity?

2019 ◽  
Vol 19 (1) ◽  
pp. 60-79 ◽  
Author(s):  
Christopher Groening
Keyword(s):  
Firm Value ◽  
Gender Diversity ◽  
Abnormal Returns ◽  
Content Type ◽  
Board Committees ◽  
Societal Benefit ◽  
Gender Diverse ◽  
Board Gender Diversity ◽  
Investor Reaction ◽  
Enhancing Resources

PurposeThis paper aims to use the passage of the Italian Gender Diversity Law to help isolate the effects of board gender diversity on firm value by investigating conditions under which such diversity provides greater role-enhancing resources to the board.Design/methodology/approachThis paper used a one-day event study to measure when gender diversity matters to investors. Abnormal returns from Italian firms were used to study investors’ anticipated outcomes of the effect of gender diversity on firm value.FindingsBoard gender diversity is financially beneficial especially for firms with a male dual CEO and board chair and with few or no women on board committees and firms that operate in industries with greater levels of competition. Addition of these moderators more than doubles the variance explained. Moreover, the effect of gender is isolated in this study, which examined investor reaction to the expectation of increases in the number of female board members, rather than to specific female appointees.Social implicationsDetermining the conditions when a gender diverse matters to firm value is important for shareholders, policymakers and advocates for gender equality. The findings illustrate precise conditions for stakeholders to make the case for board gender diversity as achieving financial reward, in addition to societal benefit.Originality/valueThe value of a gender diverse board is contingent on the company’s need for diverse resources (e.g. more competition, lack of gender diversity on committees or CEO duality). This paper provides insight as to why prior research linking board gender diversity to firm value finds seemingly contradictory results. Thus, this paper provides useful insights for researchers, boards and legislative bodies.

Board Gender Diversity and Cost of Debt: Do Firm Size and Industry type matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rabiatu Kamil ◽  
Kingsley Opoku Appiah
Keyword(s):  
Firm Size ◽  
Developing Economies ◽  
Gender Diversity ◽  
Manufacturing Firms ◽  
Least Square ◽  
Cost Of Debt ◽  
Content Type ◽  
Industry Type ◽  
Gender Diverse ◽  
Board Gender Diversity

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.

Board gender diversity and US corporate bonds

2019 ◽  
Vol 15 (5) ◽  
pp. 771-791 ◽  
Author(s):  
Renee M. Oyotode-Adebile ◽  
Zubair Ali Raja
Keyword(s):  
Panel Data ◽  
Propensity Score ◽  
Design Methodology ◽  
Gender Diversity ◽  
Data Set ◽  
Content Type ◽  
Gender Diverse ◽  
Board Gender Diversity ◽  
The Impact ◽  
Women Participation

Purpose The purpose of this paper is to examine the impact of board gender diversity on bond terms and bondholders’ returns. Design/methodology/approach The authors perform pooled OLS regression, simultaneous regressions and propensity score matching to a panel data set of bond data for 319 US firms from 2007 to 2014. Findings The authors find that firms with gender-diverse boards have lower yields, higher ratings, larger issue size and shorter maturity. They also find that bondholders require fewer returns from firms with gender-diverse boards. However, the effect is more pronounced when women, constitutes at least 29.67 percent of the board. Originality/value This analysis supplements the findings that board gender diversity is essential for bondholders. It shows that bondholders should look at board gender diversity as a criterion to invest because bonds issued by firms with gender-diverse board have less risk. For practitioners, this study shows that more women participation on boards leads to a reduction in borrowing costs.

Women directors’ effect on firm value and performance: the case of REITs

2020 ◽  
Vol 20 (7) ◽  
pp. 1265-1279
Author(s):  
Magdy Noguera
Keyword(s):  
Firm Value ◽  
Critical Mass ◽  
Gender Diversity ◽  
Chief Executive ◽  
Women Directors ◽  
Content Type ◽  
Board Of Director ◽  
Sarbanes Oxley ◽  
And Performance ◽  
Board Gender Diversity

Purpose The purpose of this paper is to assess the effect of women directors on US Real Estate Investment Trusts (REITs) value and performance. Design/methodology/approach Archival financial and board of director data for the 1999–2019 period are collected and analyzed using panel data regression analysis. Findings The main findings indicate that women directors’ presence renders a modest positive effect on REIT performance but only when they reach critical mass on REIT boards; and that women directors have no effect at all on REIT value. Additional findings indicate that women directors are more common on REIT boards after the enactment of the Sarbanes–Oxley Act but less common on boards in which the REIT founder is the chief executive officer. Originality/value To the best of the author’s knowledge, this is the first research on the effect of a gender diverse board on REIT value. It is also the first paper documenting a positive relationship between board gender diversity and REIT performance. This paper fills a research gap, as it is one of the few papers focused on gender diversity within the REITs board composition literature.

scholarly journals Gender diversity and firm value: evidence from UK financial institutions

2019 ◽  
Vol 27 (1) ◽  
pp. 2-26 ◽  
Author(s):  
Peter Agyemang-Mintah ◽  
Hannu Schadewitz
Keyword(s):  
Financial Crisis ◽  
Financial Institutions ◽  
Firm Value ◽  
Fixed Effects ◽  
Global Financial Crisis ◽  
Gender Diversity ◽  
Corporate Boards ◽  
Content Type ◽  
Board Gender Diversity ◽  
Practical Implications

PurposeThe purpose of this paper is, first, to empirically examine whether the appointment of females (board gender diversity) to the corporate boards of UK financial institutions can improve firm value, and second, to examine whether having females on the boards of UK financial institutions can impact firm value during the pre-/post-global financial crisis periods.Design/methodology/approachThe paper uses secondary data obtained from DataStream covering 63 financial institutions over a period of 12 years. A number of additional statistical estimations, including random effects and fixed effects, are conducted to test the robustness of the findings.FindingsThe outcome of this empirical research shows that the presence of females on the corporate boards of UK financial institutions has a positive and statistically significant relationship with firm value. The authors’ evidence reveals a positive and statistically significant impact on the firm’s value prior to the financial crisis, that is, during the pre-crisis period (2000-2006), meaning that women contributed significantly to the firm’s value. However, after the financial crisis, the presence of females on the board had no significant effect on the firm’s value. A reasonable explanation may be that, whilst the financial crisis was over in the period 2009-2011, the entire UK economy was still experiencing an economic downturn, and financial firms were no exception, irrespective of whether there was female representation on any corporate board. Overall, the findings are consistent with the prior studies.Practical implicationsThe results have practical implications for governments, policy-makers and regulatory authorities, by indicating the importance of women to corporate success.Originality/valueDespite several research projects on board gender diversity (BGD), this research is unique compared to the previous empirical studies, primarily because it is the first-time research of this nature is empirically ascertaining BGD and firm value in UK financial institutions, also during the pre-/post-financial crisis era. This paper contributes to the corporate governance literature by offering new insights on board diversity and firms’ value relationship. Overall, the results help fill any gaps on gender diversity and firm value in UK financial institutions.

Corporate governance and firm value: a study on European financial institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hanen Ben Fatma ◽  
Jamel Chouaibi
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Firm Value ◽  
Gender Diversity ◽  
Ownership Concentration ◽  
Board Independence ◽  
Board Size ◽  
Content Type ◽  
Corporate Governance Mechanisms ◽  
Board Gender Diversity

PurposeThe purpose of this paper is to examine the impact of the characteristics of two corporate governance mechanisms, namely, board of directors and ownership structure, on the firm value of European financial institutions.Design/methodology/approachUsing the market-to-book ratio calculated by the Thomson Reuters Eikon ASSET4 database, this study measures the firm value of 111 financial institutions belonging to 12 European countries listed on the stock exchange during the period 2007–2019. Multivariate regression analysis on panel data is used to estimate the relationship between corporate governance attributes, such as board size, board independence, board gender diversity, ownership concentration and CEO ownership, and the firm value of European financial institutions.FindingsThe empirical results reveal that board gender diversity and CEO ownership are positively related to the firm value, whereas board size and ownership concentration are negatively related. Furthermore, the findings suggest that board independence is insignificantly correlated with the firm value. Regarding the control variables, the results show that financial institutions' size, age and legal system are significant factors in changing the firm value. Nevertheless, financial institutions' leverage and activity sector are not significantly correlated with their value.Originality/valueThis research contributes to the literature by providing the significant links between some corporate governance mechanisms and the firm value of companies from the financial industry, by addressing the information gap for this critical industry in the context of a developed market like Europe.

Board gender diversity: performance and risk of Brazilian firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mauro Mastella ◽  
Daniel Vancin ◽  
Marcelo Perlin ◽  
Guilherme Kirch
Keyword(s):  
Firm Performance ◽  
Boards Of Directors ◽  
Gender Diversity ◽  
Ordinary Least Squares ◽  
Firm Risk ◽  
Content Type ◽  
Study Approach ◽  
Female Presence ◽  
Board Gender Diversity ◽  
The Impact

Purpose This study aims to intend to check if female board representation affects performance and risk and to analyse the evolution of the demographic aspects of the presence of women on boards in Brazil. Design/methodology/approach The authors used a sample of 150 Brazilian publicly traded companies from 2010–2018, with different measures of firm performance, firm risk and women’s presence on the board. The study approach is based on a set of ordinary least squares, quantile and panel data regressions. Findings The presence of women on the board has a positive effect on all of our accounting and market performance measures. However, the result of the impact on risk is not conclusive. The study also found that the number of females on the board has a more significant effect at the lower levels of firm performance measured by return on equity, but at the higher levels when measured by Tobin’s Q. Regarding return on assets, the more significant effect happened on the extremes of the performance distribution. The study findings point that market investors place more value in female presence on the board than in director positions. Originality/value By estimating the impact of women’s presence on the boards of directors in firm performance and risk, this study aimed to verify this impact in different aspects of the company. In addition, the authors did so in a sample with many years, making it possible to evaluate the historical evolution of the feminine presence in the boards of administration as well as in the groups of directors, assisting Brazilian legislators with new evidence about the possible impacts of Draft Law 7179/2017.

Does board gender diversity affect the transparency of corporate political disclosure?

2018 ◽  
Vol 26 (4) ◽  
pp. 444-463 ◽  
Author(s):  
D.G. DeBoskey ◽  
Yan Luo ◽  
Jeff Wang
Keyword(s):  
Corporate Governance ◽  
Voluntary Disclosure ◽  
Gender Diversity ◽  
Political Activity ◽  
Political Contributions ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Ethics Research ◽  
Board Gender Diversity

Purpose The purpose of this paper is to examine the influence of board gender diversity on the transparency of corporate political disclosure (CPD). Design/methodology/approach Two empirical proxies, CPD transparency and policy transparency, are constructed from a data set jointly produced by the Center of Political Activity and the Carol and Lawrence Zicklin Center for Business Ethics Research. The CPD transparency score measures the level of transparency in voluntary corporate disclosure of the amount of political contributions and the identity of the recipients as well as the titles and names of the executives who authorize the political spending. The policy transparency score measures the level of transparency in the voluntary disclosure of the policies governing corporate political spending. Board gender diversity is measured by the percentage of women on the board of directors. Findings Higher proportions of female directors are associated with more transparent disclosure of political contributions after controlling for a set of corporate governance and firm-level variables. Originality/value This study is the first to examine whether and how gender-diversified boards enhance the transparency of CPD. It contributes to the literature by providing evidence that gender-diversified boards enhance corporate governance.

Board Gender Diversity, Family-Connected Directors and Firm Value

2018 ◽  
Author(s):  
Sudheer Reddy ◽  
Madhu Veeraraghavan ◽  
Aditya Jadhav
Keyword(s):  
Firm Value ◽  
Gender Diversity ◽  
Board Gender Diversity

New product announcement: spokesperson a manifestation of increasing firm value

2018 ◽  
Vol 13 (6) ◽  
pp. 1635-1655
Author(s):  
Bikram Jit Singh Mann ◽  
Sonia Babbar
Keyword(s):  
Event Study ◽  
Firm Value ◽  
Source Credibility ◽  
Shareholder Value ◽  
Abnormal Returns ◽  
New Product ◽  
Content Type ◽  
Study Methodology ◽  
The Impact

Purpose Before introducing new products, companies make announcements regarding the launch of the product which influences stock market yields of the announcing companies. Information content of the new product announcement has never been an exclusive focused stream of research. Therefore, an assessment of the impact of the content characteristics of the new product announcement on the shareholder value and the impact of source credibility (spokesperson) in making such announcements is a major gap in the existing literature. The paper aims to discuss these issues. Design/methodology/approach First, the standard event study methodology has been employed on the sample to measure the abnormal gains/losses accruing to the announcing firms. Second, moderated regression analysis (MRA) is employed to identify the characteristics of the new product announcement and to check the role of the spokesperson in creating shareholder value. Findings The results of the event study indicate that the abnormal returns are generated during the new product announcement. The results of MRA disclose the variables having a positive and a significant influence on the effective returns of the announcing companies. Likewise, the role of the spokesperson has come out brightly as a credible communicator. Originality/value The research provides a direction to the announcing companies regarding the content of the announcement leading to a positive perception among the investing community. Likewise, it also provides direction to the investor community about the characteristics of the announcement content they give weight age in forming a perception of strength in evaluating the new product announcement, to which they are largely unaware.

Sign in / Sign up

Export Citation Format

Share Document