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.

Board gender diversity, governance and Egyptian listed firms' performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maha Mohamed Ramadan ◽  
Mostafa Kamal Hassan
Keyword(s):  
Gender Diversity ◽  
Institutional Ownership ◽  
Resource Dependence Theory ◽  
Least Square ◽  
Managerial Ownership ◽  
Executive Directors ◽  
Governance Mechanisms ◽  
Board Size ◽  
Content Type ◽  
Board Gender Diversity

PurposeThe study aimed to examine the effect of corporate governance mechanisms on the performance of Egyptian firms listed in the Egyptian Stock Exchange (EGX) between 2014 and 2016.Design/methodology/approachWe relied on agency theory and resource dependence theory to generate testable hypotheses and capture the empirical findings. We regressed various performance measures (Return on Assets; Asset Utilization Ratio, Tobin's Q) regarding governance mechanisms (institutional ownership, managerial ownership, board size, board frequent meetings, the presence of non-executive directors and female directors) while controlling for firm size, leverage, years of listing and market share. The study uses ordinary least square (OLS) and two stages least square (2SLS) regression analysis to address the possible endogenous impact of the firms' ownership structure.FindingsBoard gender diversity, the managerial ownership and frequent board meetings positively influence the Egyptian firms' efficiency measured by assets utilization, while the institutional ownership and board size have negative effects. When using Tobin's Q, the managerial ownership shows a negative effect while institutional ownership and board size present positive effects. When using 2SLS regression, findings remained stable whereas non-executive directors showed a significant negative association with assets utilization.Practical implicationsPolicy makers are recommended to draft policies related to limiting the number of board members, diluting the government's indirect ownership of firms, empowering women in boardrooms and developing the skills needed for non-executive directors.Originality/valueTo the best of our knowledge, our study is one of very few that address firms' performance after a period of political instability accompanied by a greater role for females in the boardrooms of Egypt.

Gender diversity in compensation committees and CEO pay: evidence from China

2018 ◽  
Vol 56 (5) ◽  
pp. 1065-1087 ◽  
Author(s):  
Muhammad Usman ◽  
Junrui Zhang ◽  
Fangjun Wang ◽  
Junqin Sun ◽  
Muhammad Abdul Majid Makki
Keyword(s):  
Firm Performance ◽  
Critical Mass ◽  
Gender Diversity ◽  
Least Square ◽  
Content Type ◽  
Female Directors ◽  
Gender Diverse ◽  
Ceo Pay ◽  
Female Director ◽  
Compensation Committees

Purpose The purpose of this paper is to address whether gender diversity on compensation committees ensures objective determination of CEOs’ compensation. Design/methodology/approach The authors use a sample of companies listed in China from 2006 to 2015. The authors use pooled ordinary least square regression as the baseline methodology, and two-stage least square regression and propensity score matching to control for endogeneity. Findings The authors find evidence that gender-diverse compensation committees limit CEOs’ total cash compensation and strengthen the link between CEO pay and firm performance, but only independent female directors have a significant impact, indicating that the monitoring effect outweighs the executive effect. Moreover, compensation committees with a critical mass of female directors have more impact on CEOs’ total pay and the link between CEO pay and firm performance than do committees with a single female director. Finally, gender-diverse compensation committees are more effective in setting CEOs’ compensation in state-controlled firms, where agency issues are more severe. Practical implications Female directors can improve firm-level governance by monitoring management actions, such as setting CEOs’ compensation. The study contributes to the debate on gender diversity in the boardroom, finding a positive economic effect. The study sheds light on China’s diversity practices at the director level and provides empirical guidance to China’s regulatory bodies. Originality/value The authors extend earlier studies by providing the first empirical evidence that gender-diverse compensation committees strengthen the link between CEO pay and firm performance; that independent female directors are more effective in the monitoring role than executive female directors; that compensation committees with a critical mass of female directors are more effective in setting CEOs’ pay than are committees with a single female director; and that the influence of gender-diverse compensation committees on CEOs’ pay varies by type of ownership.

scholarly journals Do Board Gender Diversity and Non-Executive Directors Affect CSR Reporting? Insight from Agency Theory Perspective

2020 ◽  
Vol 12 (20) ◽  
pp. 8597
Author(s):  
Cheng Guping ◽  
Muhammad Safdar Sial ◽  
Peng Wan ◽  
Alina Badulescu ◽  
Daniel Badulescu ◽  
...  
Keyword(s):  
Firm Size ◽  
Stock Exchange ◽  
Gender Diversity ◽  
Least Square ◽  
Executive Directors ◽  
Csr Reporting ◽  
Financial Firms ◽  
Big 4 ◽  
Using Data ◽  
Board Gender Diversity

Our paper provides a valuable contribution by exploring the following complex phenomenon: Do board gender diversity and reputational incentives of non-executive directors affect corporate social responsibility(CSR) reporting? To this end, we use panel data regression (fixed effect) to examine the above relationship by using data from the 2009 to 2019 timeperiod, by using data from non-financial firms listed on the Shanghai Stock Exchange. To deal with the possibility of an endogeneity problem, we have used the two-stage least square (2SLS) regression model. Our empirical results suggest that board gender diversity positively affects CSR reporting. Our study has found that the reputational incentives of non-executive directors improve the CSR reporting. Furthermore, reputational incentives of non-executive directors (NEDs) and CSR reporting are moderated by firm size, this effect being stronger for large firms. Our findings also show that the firm size positively moderates the relationship between gender diversity in boards and CSR reporting. The control variables, namely board size, board member average tenure, leverage, “big 4” and return on assets, have an impact on the firm’s CSR reporting. Therefore, our results contribute towards new aspects in respect to the emerging literature concerning the system of non-executive directors, protection of stakeholder’s interests, and CSR reporting, especially as regards China. Furthermore, our results are robust as concerns alternative measures of variables under consideration.

Board gender diversity and firms' internationalization speed: the role of female directors' characteristics

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ge Ren ◽  
Ping Zeng
Keyword(s):  
Gender Diversity ◽  
Schema Theory ◽  
Manufacturing Firms ◽  
Economic Consequences ◽  
Content Type ◽  
Upper Echelons Theory ◽  
Female Directors ◽  
Internationalization Speed ◽  
Board Gender Diversity ◽  
The Impact

PurposeDrawing on the gender self-schema theory, upper echelons theory and the literature on international business, this study aims to examine the impact of board gender diversity on firms' internationalization speed.Design/methodology/approachIn this study, secondary data of 886 listed Chinese manufacturing firms from 2009 to 2018 are studied using the ordinary least squares regression model as the baseline method, an instrumental variable method is adopted for endogeneity control and both fixed and random effect models are adopted for the robustness test.FindingsBoard gender diversity reduces firms' internationalization speed, and the negative effect between board gender diversity and internationalization speed is stronger when the average age of female directors is older and weaker when female directors have international experience or financial background.Practical implicationsFirst, Chinese firms need to increase or decrease board gender diversity to match the board to firms' internationalization strategy. Increasing board gender diversity may be a more appropriate choice for firms that are expanding rapidly internationally, and vice versa. Second, when introducing female directors to international firms, it is essential to address other characteristics of these directors beyond their gender.Originality/valueFirst, the authors contribute to the literature on board gender diversity using Chinese manufacturing firms as our research sample, which provides new insights into the economic consequences of increasing the number of female directors. Second, this research contributes to the literature on firms' internationalization speed. Third, the authors capture in more detail the economic consequences of increasing board gender diversity in the context of China.

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.

scholarly journals Executives' pay–performance link in China: evidence from independent and gender-diverse compensation committees

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Usman ◽  
Muhammad Abubakkar Siddique ◽  
Muhammad Abdul Majid Makki ◽  
Ammar Ali Gull ◽  
Ali Dardour ◽  
...  
Keyword(s):  
Firm Performance ◽  
Gender Diversity ◽  
Least Square ◽  
Content Type ◽  
Compensation Committee ◽  
Top Managers ◽  
Gender Diverse ◽  
Regulatory Bodies ◽  
And Gender ◽  
The Relationship

PurposeIn this paper, the authors investigate whether an independent and gender-diverse compensation committee strengthens the relationship between top managers' pay and firm performance in Chinese companies. The authors also investigate whether the independent compensation committee composed of all male directors is effective in designing the optimal contract for executives.Design/methodology/approachThe authors use data from A-share listed companies on the Shenzhen and Shanghai stock exchanges from 2005 to 2015. As a baseline methodology, the authors use pooled ordinary least square (OLS) regression to draw inferences. In addition, cluster OLS regression, two-stage least square regression, the two-stage Heckman test and the propensity score matching method are also used to control for endogeneity issues.FindingsThe authors find evidence that an independent or gender-diverse compensation committee strengthens the link between top managers' pay and firm performance; that the presence of a woman on the compensation committee enhances the positive influence of committee independence on this relationship; that a compensation committee's independence or gender diversity is more effective in designing top managers' compensation in legal-person-controlled firms than they are in state-controlled firms; that gender diversity on the compensation committee is negatively associated with top managers' total pay; and that an independent compensation committee pays top managers more.Practical implicationsThe study results highlight the role of an independent compensation committee in designing optimal contracts for top managers. The authors provide empirical evidence that a woman on the compensation committee strengthens its objectivity in determining top managers' compensation. The study finding supports regulatory bodies' recommendations regarding independent and women directors.Social implicationsThe study findings contribute to the recent debate about gender equality around the globe. Given the discrimination against women, many regulatory bodies mandate a quota for women on corporate boards. The study findings support the regulatory bodies' recommendations by highlighting the economic benefit of having women in top management positions.Originality/valueThis study contributes to literature by investigating the largely overlooked questions of whether having a gender-diverse or independent compensation committee strengthens the relationship between top managers' pay and firm performance; whether an independent compensation committee is more efficient in setting executives' pay when it is gender-diverse; and whether the effect of independent directors and female directors on top managers' compensation varies based on the firm's ownership structure. Overall, the main contribution of the study is that the authors provide robust empirical evidence in support of the managerial power axiom.

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.

Corporate governance and firm performance: empirical evidence from Pakistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Farooq ◽  
Amna Noor ◽  
Shoukat Ali
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Firm Size ◽  
Good Governance ◽  
Positive Impact ◽  
Least Square ◽  
Local Context ◽  
Content Type ◽  
Governance Index ◽  
Governance Quality

Purpose The purpose of this research is to look into the governance–performance relationship in the context of critical firm characteristics, such as firm size. Design/methodology/approach Based on total assets, sample firms were classified as small or large. The governance index, which is based on 29 governance provisions covering the audit committee, board committee, ownership and compensation structure of the respective firm, measures governance quality among sample firms. A higher governance index indicates a higher level of governance quality and vice versa. Accounting and market value measures are used to determine firm profitability. The authors used the two-stage least square (2SLS) method of estimation of the model to eliminate the simultaneous equation bias. Findings Corporate governance (CG) appears to have a positive impact on accounting return and market indices (Tobin’s Q), but it has little impact on return on equity. In terms of firm size, larger companies profited more from better governance implementation than smaller firms that lacked these principles, thus improving CG. The findings indicate that small businesses should improve their governance mechanisms to reap the benefits of CG in terms of increased profitability. Research limitations/implications There are certain drawbacks to this research. First, the authors omitted qualitative aspects of CG from the CG index, such as the board’s decision-making process, directors’ perceptions of the board’s position and directors’ age and qualifications. Such a qualitative component will improve the governance index in the future while building the governance index. Second, as the current study only looks at the nonfinancial sector, caution should be exercised before applying the findings to the entire population. Practical implications The findings show that companies that follow good governance standards have better accounting and market efficiency than those that do not. As a result, good governance practices can help firms in developing countries improve their performance. Academic researchers, regulators, investors, lenders and practitioners can find the findings useful in establishing a true relationship between firm performance and CG practices in Pakistan. Originality/value The relationship between governance and profitability in the context of firm size is examined in this research. Firms with varying resources and ability to implement CG codes have varying effects on profitability. To the authors’ knowledge, there was a gap in the literature that addressed this topic in the local context.

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.

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