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.

Women on board: evidence from a masculine industry

2015 ◽  
Vol 15 (3) ◽  
pp. 339-356 ◽  
Author(s):  
Claudia Arena ◽  
Alessandro Cirillo ◽  
Donata Mussolino ◽  
Ingrid Pulcinelli ◽  
Sara Saggese ◽  
...  
Keyword(s):  
Firm Performance ◽  
Educational Level ◽  
Demographic Variable ◽  
Critical Mass ◽  
Gender Diversity ◽  
Ordinary Least Squares ◽  
Women Directors ◽  
Content Type ◽  
Board Gender Diversity ◽  
The Impact

Purpose – This paper aims to provide insights on the gender-performance relationship, this paper studies the impact of board gender diversity on firm performance, by taking into account the “critical mass” of women directors and their educational level. Design/methodology/approach – The hypotheses are tested on a unique dataset of 211 European Union publicly listed companies in 2012 belonging to the construction industry from 28 different countries through a set of ordinary least squares regressions. Findings – The evidence shows that the “critical mass” rather than the simple presence of women has an incremental benefit on firm performance. In addition, results show that the educational level of women directors negatively affects firm performance, as it might impact the dynamics within the boardroom. Research limitations/implications – The quantitative nature of the study does not allow drawing strong inferences on behavioral processes and dynamics in and around the boardroom. Nevertheless, this study will open new research insights on exploring the educational level on board. Practical implications – Regulators and policymakers that should be aware of the influence of women as a group on firm performance and that this role is differential across industries. Originality/value – The novelty of this paper is that it investigates the role of women in a high masculine gender-specific industry and explores a still poorly understood demographic variable (i.e. the educational level) of women directors.

Private firm performance: do women directors matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahnoor Sattar ◽  
Pallab Kumar Biswas ◽  
Helen Roberts
Keyword(s):  
Firm Performance ◽  
Performance Measures ◽  
Small Firm ◽  
Gender Diversity ◽  
Private Firm ◽  
Private Firms ◽  
Women Directors ◽  
Content Type ◽  
Firm Profitability ◽  
Board Gender Diversity

Purpose This paper aims to examine the relationship between board gender diversity and private firm performance. Design/methodology/approach The authors test the association between board gender diversity and private firm performance by estimating pooled multivariate regressions using an unbalanced panel data set of 115,253 firm-year observations. Findings The authors find that younger, less busy and local women directors enhance private firm performance. Firms with 40% or more women directors report triple the economic benefits compared to boards with at least 20% women directors. Considering firm size, women directors significantly increase small firm profitability, and the effect is more pronounced for high-risk firms. Greater board gender diversity enhances small firm performance as the monitoring role of women directors benefits the firm even in the presence of busy men directors. Consistent with the agency theory framework, the authors find that women directors improve small firm profitability in the presence of agency costs. Research limitations/implications Due to the lack of availability of data about private firms, many factors are not directly observable. The analysis uses accounting-based performance measures that may be subject to managerial discretion. Nevertheless, the authors report highly significant results using cash-based performance measures that substantiate the overall findings. Practical implications The results of the present study point to the need for private firms to increase board gender diversity and consider women director busyness, age, nationality and firm size when making board director appointments. Originality/value This study adds to the scarce existent literature investigating private firms. The results contribute to the understanding of gender-diverse boards as well as the attributes of women directors that enhance private firm performance.

Do women on corporate boardrooms influence remuneration patterns and socially responsible practices? Malaysian evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sitara Karim
Keyword(s):  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Executive Directors ◽  
Women Directors ◽  
Socially Responsible ◽  
Content Type ◽  
Upper Echelons Theory ◽  
Board Gender Diversity ◽  
The Relationship ◽  
Practical Implications

PurposeThe prime objective of this study is to investigate the moderating influence of executive and independent female directors on the relationship between remuneration packages (CEO and executive director) and socially responsible practices (marketplace, environment, community, workplace and money spent on CSR) of 483 Malaysian listed firms during 2006–2017.Design/methodology/approachThe dynamic estimator, namely, system generalized method of moments (GMM) given by Blundell and Bond (1998) has been employed on the dataset to control dynamic endogeneity, unobserved heterogeneity and simultaneity problems.FindingsFindings indicate that there is a significant relationship between remuneration patterns of CEOs and executive directors and socially responsible activities. In the same way, executive board gender diversity significantly, whereas independent board gender diversity insignificantly moderates the remuneration and CSR nexus.Practical implicationsThis study is particularly significant for regulatory bodies of Malaysia, e.g. Securities Commission Malaysia, Bursa Malaysia, policy makers, investors and managers. For academia, this study fetches support from agency theory, stakeholder theory and upper echelons theory and presents integrated theoretical approach to be considered for future research.Originality/valueThis paper is unique in providing empirical evidence on the moderating effect of both executive and independent women directors on the relationship between remuneration patterns of CEOs and executive directors and independent CSR activities for the first time. Moreover, this study has sourced several theoretical and practical implications. And, the study employs dynamic estimator for precise and concrete results.

scholarly journals Can board gender diversity promote corporate social performance?

2017 ◽  
Vol 17 (5) ◽  
pp. 789-802 ◽  
Author(s):  
Khine Kyaw ◽  
Mojisola Olugbode ◽  
Barbara Petracci
Keyword(s):  
Emerging Markets ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Critical Mass ◽  
Gender Diversity ◽  
Corporate Boards ◽  
Content Type ◽  
Clear Cut ◽  
Board Gender Diversity ◽  
Corporate Social

Purpose This paper examines if gender diversity on corporate boards promotes corporate social performance (CSP) across industries and across countries. Design/methodology/approach Fixed-effect panel models are estimated using Europe-wide data from 2002 through 2013. Instrumental variable estimation and propensity score matching are also used to control for potential endogeneity. Findings Board gender diversity (BGD) improves environmental and social performance and consequently the CSP. Although the positive effect of gender diversity is prevalent across industries, the effect is more pronounced for firms in emerging markets. Practical implications The findings suggest that gender law that fosters gender diversity can promote CSP in firms, and the benefit can be enjoyed with just an introduction of one female director to the board. Promotion of gender diversity in Europe is most beneficial in emerging markets. Originality/value The results provide new insights to the literature, as we find that a critical mass of female directors on boards is not required to promote CSP. The research also highlights that BGD enhances CSP irrespective of the industry, and the effect on CSP is more pronounced in emerging markets where regulations regarding CSR are not so clear-cut.

What drives the impact of women directors on firm performance? Evidence from intellectual capital efficiency of US listed firms

2019 ◽  
Vol 21 (4) ◽  
pp. 513-530 ◽  
Author(s):  
Faisal Shahzad ◽  
Mushahid Hussain Baig ◽  
Ijaz Ur Rehman ◽  
Fawad Latif ◽  
Bruno S. Sergi
Keyword(s):  
Intellectual Capital ◽  
Gender Diversity ◽  
Performance Measure ◽  
Women Directors ◽  
Firm Level ◽  
Content Type ◽  
Capital Efficiency ◽  
Board Gender Diversity ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to study whether the presence of women directors on the corporate board influences financial performance (FP). To examine the underlying causal mechanism, the authors modeled firm-level intellectual capital efficiency (ICE) in the relationshipbetween board gender diversity (BGD) and FP. Design/methodology/approach Using a sample of 5,879 US firms, a structural model of BGD, IC and FP is conceptualized by accounting for the endogeneity issues and alternative measures of the key variables in the empirical framework. In the model, the percentage of women directors is taken as BGD measures and value-added intellectual coefficient as an IC performance measure, considering governance and corporate performance measures. Findings The authors find a significant impact of BGD on FP. In particular, the results suggest: BGD is linked to IC; the influence of board gender diversity on the FP is indirect; and ICE fully mediates the relationship between BGD and FP. Originality/value To the best of the author’s knowledge, no study has empirically investigated whether the firm-level IC performance explains the influence of BGD on FP. Drawing on the resource-based view and organizational learning theory of the firm, the authors empirically modeled the relationship between BGD and FP through a mediation mechanism of firm-level ICE to fill the void in the literature.

Female directors and agency costs: evidence from Chinese listed firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qurat Ul Ain ◽  
Xianghui Yuan ◽  
Hafiz Mustansar Javaid ◽  
Muhammad Usman ◽  
Muhammad Haris
Keyword(s):  
Agency Costs ◽  
Conflicts Of Interest ◽  
Critical Mass ◽  
Gender Diversity ◽  
Ordinary Least Squares ◽  
Content Type ◽  
Listed Firms ◽  
Female Directors ◽  
Wide Range ◽  
Board Gender Diversity

PurposeThe purpose of this research is to examine whether board gender diversity reduces the agency costs of firms in the context of Chinese listed firms.Design/methodology/approachThis paper uses a large sample of 23,340 firm-year observations of Chinese listed companies during 2004–2017. The authors use ordinary least squares regressions as the primary methodology with a wide range of methods to control for endogeneity and to check robustness, including the fixed-effect method, instrumental variable approach, lagged gender diversity measures, propensity score matching, Blau index, Shannon index and industry-adjusted measures of agency costs.FindingsThe evidence reveals that the participation of female directors in corporate board reduces agency costs, which correlates with conflicts of interest. Moreover, gender-diverse boards are more effective in state-owned enterprises (SOEs), in which agency issues are more severe. Female directors also provide better monitoring roles in more-developed areas. Finally, corporate boards that have a critical mass of female directors have a greater tendency to reduce agency costs as compared to their token participation. Overall, all findings support the validity of agency theory.Practical implicationsThis study shows the economic benefit of female directors in the boardroom by reducing agency costs and by improving firms' governance structure. Regarding the government, which is gradually introducing board gender diversity policies, this study provides valuable pragmatic information for Chinese regulators on this issue.Originality/valueThis study extends the literature by providing evidence that gender diversity in boardroom matters for shareholders' wealth maximization. It provides novel evidence that a critical mass of female directors is more effective in reducing agency costs compared to a single female on the board, and that the effect of gender diversity varies in relation to ownership structure and region.

scholarly journals Gender Diversity on the Board of Director and Firm Performance: Agency Theory Perspective

2021 ◽  
Vol 12 (2) ◽  
Author(s):  
Lela Hindasah ◽  
Mugi Harsono
Keyword(s):  
Corporate Governance ◽  
Selection Process ◽  
Gender Diversity ◽  
Future Research ◽  
Company Performance ◽  
Female Directors ◽  
Board Of Director ◽  
Governance Practices ◽  
And Performance ◽  
Board Gender Diversity

Research aims: This paper provides a literature review on the influence of board of directors' gender diversity on financial and non-financial performance.Design/Methodology/Approach: This research used the content analysis identified from previous studies based on the proxies employed. The article selection process was carried out from reputable international journals published in 2017-2020, resulting in 50 articles discussing board gender diversity and performance.Research findings: This study's results are a conceptual model and future research developments. Research related to female directors and performance has been much carried out. Hence, future research suggests correlating female directors based on monitoring characteristics, human capital board, and demographics. The influence of gender diversity on non-financial performance is also rarely studied.Theoretical contribution/Originality: Identification of gender diversity attributes associated with financial and non-financial performancePractitioner/Policy implication: This study provides valuable information for policymakers or regulators to refine future corporate governance policies and increase understanding of the relationship between corporate governance practices and company performance as measured by financial and non-financial performance.Research limitation/Implication: This study is based on only 50 articles in the last four years.

The impact of board gender diversity and foreign institutional investors on firm innovation: evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qurat Ul Ain ◽  
Xianghui Yuan ◽  
Hafiz Mustansar Javaid
Keyword(s):  
Critical Mass ◽  
Gender Diversity ◽  
Manufacturing Firms ◽  
Firm Innovation ◽  
Content Type ◽  
Foreign Institutional Investors ◽  
Patent Applications ◽  
Board Gender Diversity ◽  
Mass Participation ◽  
The Impact

PurposeThis study investigates the impact of board gender diversity and foreign ownership on innovation in Chinese firms.Design/methodology/approachThe authors use data for Chinese manufacturing firms listed on the Shanghai and Shenzhen stock exchanges, for a sample over the period 2008–2017. Ordinary least square (OLS) is used as the baseline methodology, with cluster OLS, two-stage Heckman test, Blau index and Shannon index used to address endogeneity issues.FindingsThe results show that gender diversity on the board has a positive effect on corporate innovation as measured by the total number of patent applications, invention patent applications, utility model patent applications and design patent applications. Our findings also provide support for the critical mass participation of female directors on the board being associated with more innovation. They also reveal that innovation output does not vary across state-owned enterprises (SOEs) and non-SOEs. These outcomes reveal that SOEs' advantages, such as easy access to funding and more support of government, are likely offset by their disadvantages, such as different goals and having more agency issues. Because of intense political power and networks in Chinese firms, qualified foreign institutional investors (QFIIs) are less motivated to enhance innovation activities.Practical implicationsThis study highlights the role of board gender diversity in enhancing innovation among Chinese manufacturing firms. Our findings provide support for regulatory bodies' role regarding women's participation on the board.Originality/valueThis research adds to literature by addressing the largely ignored questions of whether providing a gender-diverse board enhances innovation, whether critical mass participation has a greater effect on improving firm innovation and whether the influence of women directors varies with ownership structure.

Board gender diversity and the timing of CEO stock option awards

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Moncef Guizani ◽  
Ahdi Noomen Ajmi
Keyword(s):  
Stock Price ◽  
Gender Diversity ◽  
Chief Executive ◽  
Stock Option ◽  
Content Type ◽  
Instrumental Variable Analysis ◽  
Compensation Committee ◽  
Female Directors ◽  
Research Findings ◽  
Board Gender Diversity

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.

Family and state ownership, internationalization and corporate board-gender diversity

2017 ◽  
Vol 24 (2) ◽  
pp. 251-270 ◽  
Author(s):  
Abubakr Saeed ◽  
Amna Yousaf ◽  
Jaithen Alharbi
Keyword(s):  
Emerging Economies ◽  
Emerging Market ◽  
Gender Diversity ◽  
Negative Relationship ◽  
State Ownership ◽  
Women Directors ◽  
Data Set ◽  
Content Type ◽  
Emerging Market Firms ◽  
Board Gender Diversity

Purpose In times of vivid debates on the inclusion of women on boards, the purpose of this paper is to shed a new light on the composition of boardrooms in emerging market firms by investigating how family and state ownership affect board-gender diversity in the emerging economies. Design/methodology/approach This study uses Tobit regression to examine the effect of firm ownership on board-gender diversity. A panel data set of Chinese and Indian firms for the period 2004-2013 is used to conduct this study. Findings The results show a negative and significant impact of family and state ownership on the proportion of women directors. However, this relationship is seen to be reverse if the firm is operating in international markets. Notably, a negative relationship was seen to persist between ownership structure and board-gender diversity for both female executive and independent board members, whereas a positive impact of internationalization was observed only for independent female directors. Originality/value This research addresses the board-gender diversity issue in emerging economies by focusing on firm characteristics which are unique to their business context. Further, this study identifies the conditions under which emerging market firms assimilate or proscribe women on their boards by recognizing the salient features of firms from emerging markets. Hence, in doing so, new evidence is added to the studies on the determinants of board-gender diversity. Lastly, it advances the earlier literature based on resource dependency and agency views and demonstrates the importance of internationalization for the inclusion of women on corporate boards.

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