Independent board, gender diversity and bank performance in Nigeria: a system-GMM approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chinwe Okoyeuzu ◽  
Augustine Ujunwa ◽  
Angela Ifeanyi Ujunwa ◽  
Emmanuel Onyebuchi Onah
Keyword(s):  
Gender Diversity ◽  
Bank Performance ◽  
Board Independence ◽  
Annual Data ◽  
Corporate Boards ◽  
Female Representation ◽  
Content Type ◽  
And Gender ◽  
Board Gender Diversity ◽  
Negative Predictor

Purpose This study aims to examine the effects of board independence and gender diversity on bank performance in Nigeria. Design/methodology/approach The two-step system-generalized method moment was used to estimate the effect of board independence and gender diversity on bank performance in Nigeria using annual data of 15 deposit money banks from 2006 to 2018. Findings The results revealed that gender diversity is a significant positive predictor of bank performance, whereas board independence is a negative predictor of bank performance in Nigeria. Practical implications Despite the significant positive relationship between gender diversity and bank performance, this paper does not recommend mandatory quota-based initiates of female representation on corporate boards because of the increasing number of female representations on corporate boards of banks in Nigeria. Originality/value The study contributes to corporate governance literature from developing country perspective and policy, particularly, on the relevance or otherwise of market-based measures in assessing bank performance in developing counties. This paper finds that market-based variables are not good measures of firm performance in economies with underdeveloped markets.

scholarly journals Corporate board structures and intellectual capital: evidence from banks in Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nicholas Asare ◽  
Francis Aboagye-Otchere ◽  
Joseph Mensah Onumah
Keyword(s):  
Intellectual Capital ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Negative Relationship ◽  
Value Added ◽  
Board Independence ◽  
Annual Data ◽  
Board Size ◽  
Content Type ◽  
Board Gender Diversity

PurposeThis study examines the nature of the relationship between board structures (BSs) and intellectual capital (IC) of banks in Africa.Design/methodology/approachUsing annual data from financial statements of 366 banks from 26 African countries from 2007 to 2015, the study estimates IC using the value-added intellectual coefficient (VAIC) and BSs using board size, board independence and board gender diversity. The system generalized method of moments and panel-corrected standard error estimation strategies are used to estimate panel regressions.FindingsThere is a significant negative relationship between board independence and intellectual capital. The results also indicate that the IC of banks does not depend on board size and board gender diversity.Practical implicationsThe study's findings provide evidence of the extent to which BSs have been instituted to support investments in intellectual capital as a means of improving the performance of banks in Africa.Originality/valueThis study provides some empirical evidence from Africa's banking sector to justify that banks with better IC have boards that are less independent. This study is one of the few studies that employs many countries' data.

Female directors on corporate boards and their impact on corporate social responsibility (CSR): evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Waqas Bin Khidmat ◽  
Muhammad Danish Habib ◽  
Sadia Awan ◽  
Kashif Raza
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Gender Diversity ◽  
State Ownership ◽  
Corporate Boards ◽  
Female Representation ◽  
Content Type ◽  
Listed Firms ◽  
Self Selection ◽  
Corporate Social

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?

scholarly journals Board gender diversity and environmental, social and governance performance of US banks: moderating role of environmental, social and corporate governance controversies

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohammad Hassan Shakil ◽  
Mashiyat Tasnia ◽  
Md Imtiaz Mostafiz
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Resource Dependence ◽  
Gender Diversity ◽  
Corporate Boards ◽  
Omitted Variables ◽  
Content Type ◽  
Dynamic Panel Regression ◽  
Board Gender Diversity

PurposeGender diversity in corporate boards is broadly studied in existing corporate governance literature. However, the role of board gender diversity on environmental, social and governance (ESG) performance of the banks is still unaccounted for. Drawing on resource dependence and legitimacy theory, this study addresses this pressing research issue. Moreover, investigation of ESG controversies as a moderator paves the existing corporate governance research to the new avenues.Design/methodology/approachData were sourced from Refinitiv database on 37 US banks from the period of 2013 to 2017. This study employs static and dynamic panel regression models that include random effects, fixed effects and dynamic generalised method of moments (GMMs) to test the hypotheses. Furthermore, system GMM is used to reduce the issue of endogeneity, measurement error, omitted variables bias and bank-specific heterogeneity.FindingsWe identify a significant positive relationship between board gender diversity and the ESG performance of US banks. However, the result propounds non-significant moderating effect of ESG controversies on the board gender diversity–ESG performance nexus.Originality/valueLiterature on board gender diversity and ESG separately and predominantly explains firm/bank's financial performance. This study is one of the pioneering attempts to explain the role of board gender diversity on ESG performance. Although incremental, however, this study also contributes to the literature on ESG in the US context.

A social capital view of women on boards and their impact on firm performance

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Erin Oldford ◽  
Saif Ullah ◽  
Ashrafee Tanvir Hossain
Keyword(s):  
Social Capital ◽  
Firm Performance ◽  
Ethnic Diversity ◽  
Gender Diversity ◽  
Negative Relationship ◽  
Future Research ◽  
Corporate Boards ◽  
Board Diversity ◽  
Content Type ◽  
Board Gender Diversity

PurposeThe objective of this paper is to leverage a two-sided view of social capital to develop a model of board gender diversity and firm performance using social capital data from Northeast Regional Center of Rural Development.Design/methodology/approachThe authors examine a large sample of 2,322 US publicly listed firms over the period 1996 to 2009. The final sample consists of 14,634 firm-year observations.FindingsThe authors find that when a firm's social network is not supportive of gender diversity, corporate boards have lower levels of female representation. The strength of a social network's social ties exacerbates the relationship between social capital and board gender diversity. The authors also report a negative relationship between female board membership and firm performance in social networks that are not pro-diversity. Robustness tests reveal that the authors’ social capital view of board diversity also applies to board ethnic diversity.Research limitations/implicationsThis study focuses primarily on blue chip firms due to data constraints. It will be interesting for future researchers to investigate a broader spectrum of firms from a broader perspective of diversity beyond the study’s gender and ethnicity findings. Furthermore, this study assesses the US context, and future research could investigate firm sociability in other national contexts.Practical implicationsThis study contributes new insights to the discourse on gender diversity on corporate boards which stand to inform both policy and practice. The results of the study can inform the position of an industry association on board gender diversity, with guidance on how messaging across networks can be more effective should it account for the hidden bias that the authors uncover in the current study. From a manager's perspective, this study can help those managers and boards trying to enhance board gender diversity by providing a more complete understanding of the factors that can limit progress.Originality/valueThis study contributes a social capital view of board gender diversity to the growing literature of corporate governance, board diversity and local environmental influences on corporate policies.

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.

Corporate governance structures and firm performance in large agriculture companies in New Zealand

2018 ◽  
Vol 18 (5) ◽  
pp. 987-1006 ◽  
Author(s):  
Jamal Roudaki
Keyword(s):  
Corporate Governance ◽  
New Zealand ◽  
Gender Diversity ◽  
Board Independence ◽  
Content Type ◽  
The Public ◽  
Board Compensation ◽  
Board Gender Diversity ◽  
High Level ◽  
Board Ownership

PurposeThis study aims to explore the role of corporate governance (CG) characteristics on the financial performance of large agricultural companies in New Zealand. External auditor remuneration and board characteristics, such as board ownership, board compensation, board independence and board gender diversity, are addressed in the context of New Zealand’s agricultural companies by applying agency theory.Design/methodology/approachThis paper uses a balanced panel data generalised least square regression analysis on 80 firm-years of observations over the period from 2012 to 2015.FindingsEmpirical analysis revealed that external auditors’ remuneration and board characteristics, such as board compensation and board independence, except for board ownership and board gender diversity, held no association with the agricultural companies’ performance. While board ownership and board gender diversity were negatively, but significantly, associated with firm performance, these results were pronounced in the listed agricultural companies rather than in the non-listed companies.Research limitations/implicationsThis study encountered limitations commonly associated with the majority of industry-specific studies, i.e. small sample size and lack of published financial information from databases. Therefore, for generalisation, these limitations were considered relevant.Practical implicationsThe results of this research project are beneficial for authorities and agricultural company directors in implementing CG principles and guidelines to empower such companies in international competition. Encouraging agricultural companies to maintain a high level of transparency in financial reporting is of central interest for the government’s economic development, and stock market investors achieve a high level of transparency in non-financial disclosures, the chief objective of this study. Finally, the results of this paper may encourage auditors to scrutinise CG disclosures by agricultural companies in more detail, looking for undisclosed information.Social implicationsThe results of this paper may encourage managerial transparency by providing appropriate disclosures for the public benefit. Investors may benefit from the disclosure provided in their economic decision-making and the public may expand on the information disclosed in facilitating development through exports, expansion of foreign investments and the indigenous economy.Originality/valueThe findings contribute to the literature by providing novel and original insights into using a sample of listed and non-listed agricultural companies to extend the current understanding of the governance-performance nexus.

Executive directors' pay-performance link and board diversity: evidence from high free cash flow and low-growth firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chwee Ming Tee
Keyword(s):  
Cash Flow ◽  
Least Squares Method ◽  
Gender Diversity ◽  
Free Cash Flow ◽  
Executive Directors ◽  
Corporate Boards ◽  
Board Diversity ◽  
Content Type ◽  
Growth Firms ◽  
And Gender

PurposeThe purpose of this study is to examine whether board diversity can attenuate weaker executive directors' pay-performance link in high free cash flow and low-growth firms (HFCF_LGRW).Design/methodology/approachThis study employed the Malaysian dataset from 2005 till 2016 and the fixed-effect model to investigate the developed hypotheses. The two-stage least squares method (2SLS) is employed to mitigate endogeneity issues.FindingsThis study finds that a positive association between executive directors' pay and firm performance is weaker in HFCF_LGRW firms. However, board diversity, namely ethnic and gender diversity, can mitigate weaker executive directors' pay-performance link, indicating effective monitoring.Originality/valueThis study is among the first to reveal that executive directors' pay-performance link is weaker in firms with HFCF_LGRW growth, consistent with Jensen's (1986) free cash flow hypothesis. However, findings suggest that this agency problem in HFCF_LGRW firms is attenuated by board diversity, namely ethnic and gender diversity. This supports the notion that diversity in corporate boards serves as an effective internal monitor.

Female representation on the board of directors and accrual quality within the context of cultural dimensions and accounting values

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Asma Yousuf ◽  
Husam Aldamen
Keyword(s):  
National Culture ◽  
Earnings Quality ◽  
Gender Diversity ◽  
Cultural Dimensions ◽  
Female Representation ◽  
Content Type ◽  
Accruals Quality ◽  
Board Gender Diversity ◽  
Gender Quota ◽  
The Relationship

Purpose This study aims to bridge the gap in the scarce and inconclusive literature concerning the impact of gender diversity on earnings quality by positioning this relationship within an institutional context. It aims to investigate the moderating effect of different cultural dimensions and accounting values on the relationship between board gender diversity and earnings quality. Design/methodology/approach The study uses an international sample from 46 countries (3,092 public firms) for the year 2017. A two-level hierarchical linear regression model is used to test the moderating effect of Hofstede’s cultural dimensions and Gray’s accounting values on diversity and accruals quality relationship. Findings The findings suggest a positive relationship between board gender diversity and earnings quality. Results hold valid after controlling for endogeneity effect. More importantly, regarding national culture, results indicate that power distance, individualism, uncertainty avoidance, professionalism, uniformity, secrecy and conservatism moderate the relationship between female directors and accruals quality. Furthermore, different levels of female representation are essential on boards of different societies to use the benefits of gender-diversified boards in enhancing earnings quality. Research limitations/implications The study provides empirical evidence on the effectiveness of various worldwide movements toward increasing board gender diversity. Additionally, the results speak directly to gender quota regulatory bodies suggesting that “no size fits all” for gender quota requirement. Originality/value The study contributes to the stream of literature concerning gender diversity and earnings quality by investigating this relationship through the lens of national culture and emphasizing the importance of considering institutional factors in examining social interactions.

scholarly journals Boards’ Gender Diversity and Firms’ Financial and Ethical Performance in Pakistan: A Comparative Analysis

2020 ◽  
Vol 10 (3) ◽  
pp. 255
Author(s):  
Hafiz Muhammad Awais ◽  
Dr. Danish Ahmed Siddiqui
Keyword(s):  
Comparative Analysis ◽  
Performance Measures ◽  
Firm Value ◽  
Financial Risk ◽  
Gender Diversity ◽  
Corporate Boards ◽  
Female Representation ◽  
Board Diversity ◽  
Negative Effect ◽  
Board Gender Diversity

Board diversity has lately being a heavily contested topic of research. Women, having a unique pool of resources and human capital, bring unique and diverse skills to the board that could improve board performance which positively impacts firm value. This study aims to investigate board gender diversity and its impact on firms’ performance in Pakistan. More specifically, this study compares different performance characteristic of firms with and without gender diversity in boards. We also analyzed the effect of women on board (WOB) on different performance measures in the presence of control variables. These measures included Return to assets, equity and sales, TOBIN Q, and Ethical and Social Compliance (ESCC). For this, panel data of 4 years from 2015 to 2018 were collected from 100 companies, and ANOVA and regression analysis were performed. The comparative analysis showed that non-women component has a significantly higher ROA than women, whereas ROE is higher for women. Moreover, non-women board companies seem to take a higher financial risk by taking more leverage. Surprisingly, the ESCC factor seems to be significantly higher for non-women board companies showing better social compliance. Evidence from regression found remains inconclusive. In fact, the performance measures like Tobin Q, and ROA seems to be negatively affected by WOB, whereas ROE was positively and significantly affected. ESCC seems to have a strong and positive effect on Tobin Q in companies with WOB, as well as ROA in overall companies. Evidence also suggested that WOB also seems to have a negative effect on ESCC. Hence, in the case of Pakistan, the findings remained inconclusive because women representation on board is not enough to have an influencing role in the board. The size of the female representation on the board needs to be sufficiently large to have an influencing role on corporate boards.

scholarly journals Corporate governance, Islamic governance and earnings management in Oman

2017 ◽  
Vol 7 (2) ◽  
pp. 190-224 ◽  
Author(s):  
Mohamed I. Elghuweel ◽  
Collins G. Ntim ◽  
Kwaku K. Opong ◽  
Lynn Avison
Keyword(s):  
Earnings Management ◽  
Gender Diversity ◽  
Data Sets ◽  
Corporate Boards ◽  
Content Type ◽  
Audit Firm ◽  
Beliefs And Values ◽  
Corporate Earnings ◽  
Board Gender Diversity ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of corporate (CG) and Islamic (IG) governance mechanisms on corporate earnings management (EM) behaviour in Oman. Design/methodology/approach The authors employ one of the largest and extensive data sets to-date on CG, IG and EM in any developing country, consisting of a sample of 116 unique Omani listed corporations from 2001 to 2011 (i.e. 1,152 firm-year observations) and a broad CG index containing 72 CG provisions. The authors also employ a number of robust econometric models that sufficiently account for alternative CG/EM proxies and potential endogeneities. Findings First, the authors find that, on average, better-governed corporations tend to engage significantly less in EM than their poorly governed counterparts. Second, the evidence suggests that corporations that depict greater commitment towards incorporating Islamic religious beliefs and values into their operations through the establishment of an IG committee tend to engage significantly less in EM than their counterparts without such a committee. Finally and by contrast, the authors do not find any evidence that board size, audit firm size, the presence of a CG committee and board gender diversity have any significant relationship with the extent of EM. Originality/value To the best of the authors’ knowledge, this is a first empirical attempt at examining the extent to which CG and IG structures may drive EM practices that explicitly seek to draw new insights from a behavioural theoretical framework (i.e. behavioural theory of corporate boards and governance).

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