Board gender diversity, board compensation and firm performance. Evidence from Jordan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Taha Almarayeh
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Least Squares ◽  
Gender Diversity ◽  
Ordinary Least Squares ◽  
Content Type ◽  
Firm Financial Performance ◽  
Board Compensation ◽  
Board Gender Diversity ◽  
The Impact

Purpose This study aims to analyze the relationship between board gender diversity, board compensation and firm financial performance in the developing country, Jordan, whose cultural, economic and institutional context is very different from most previously analyzed countries’ context. Design/methodology/approach Ordinary least squares regression was used to examine the association between board gender diversity, board compensation and firm financial performance in a sample of 510 firm-year observations during the years 2009–2018. Generalized least squares estimation method was used to confirm that the results are robust. Findings The author provides new evidence that board gender diversity does not contribute to firm financial performance. The author also detects that there is a positive relationship between board compensation on firm financial performance. Originality/value This paper examines the under-researched relationship between board gender diversity, board compensation and firm financial performance. In so doing, the author tries to provide new insights into this relationship within the developing context, the case of Jordan that has a different environment from that of advanced markets. To the best of the researcher’s knowledge, this is almost certainly the first research to investigate the impact of board gender diversity and board compensation on firm financial performance in the Jordanian market. This manuscript is expected to be used as a reference by the regulators and policymakers – both in Jordan and other countries with a similar institutional, cultural setting – to provide a deep understanding of the impact of board gender diversity and board compensation on the firm performance.

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.

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.

The effect of board gender diversity on firm performance: evidence from Turkey

2016 ◽  
Vol 31 (7) ◽  
pp. 434-455 ◽  
Author(s):  
Merve Kılıç ◽  
Cemil Kuzey
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Empirical Studies ◽  
Gender Diversity ◽  
Content Type ◽  
Return On Equity ◽  
Firm Financial Performance ◽  
Board Gender Diversity ◽  
Return On Sales ◽  
The Relationship

Purpose This study aims to include two primary goals. First to determine the board characteristics of listed companies in Turkey and second to investigate the effect of board gender diversity on the performance of these companies. Design/methodology/approach This study uses an instrumental variables regression analysis to investigate the relationship between board gender diversity and firm performance using the data from 2008-2012 of the entities listed on the Borsa Istanbul. Findings The results indicate that the boards of these companies in Turkey are male-dominated. Moreover, this study shows that the inclusion of female directors is positively related to the financial performance of firms, as measured by the return on assets, the return on equity and the return on sales. Originality/value Limited empirical studies have been conducted on the relationship between board gender diversity and firm performance in emerging economies. Therefore, there is still no consensus regarding the link between board gender diversity and firm financial performance based upon the mixed and sometimes contradictory results in prior research. Therefore, this study extends the current literature in the context of Turkey, showing that a female member on the board can enhance the financial performance of a company.

The role of national culture in the impact of board gender diversity on firm performance: evidence from a multi-country study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Navaz Naghavi ◽  
Saeed Pahlevan Sharif ◽  
Hafezali Bin Iqbal Hussain
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Generalized Method Of Moments ◽  
Gender Diversity ◽  
Governance Structure ◽  
Corporate Governance Structure ◽  
Data Set ◽  
Content Type ◽  
Board Gender Diversity ◽  
The Impact

PurposeThis study seeks to add more insights to the debate on “whether”, “how”, and “under which condition” women representation on the board contributes to firm performance. More specifically, the current study aims to investigate if the effect of board gender diversity on firm performance is dependent on macro factors of national cultures.Design/methodology/approachThe authors used the generalized method of moments regression and a data set consists of 2,550 company year observations over 10 years.FindingsThe results indicated that cultural variables interact with board diversity to influence firm performance. Having women on the board in countries with high power distance, individualist, masculine and low-uncertainty avoidance culture influences the firm performance negatively.Originality/valueThe findings indicate that the effects of corporate governance structure on firm performance depends on culture-specific factors, providing support for the argument that institutional norms that are governed by cultural norms affect the effectiveness of corporate governance structure.

Do females in audit firm governance affect firm performance? Findings from Turkey

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Murat Ocak
Keyword(s):  
Firm Performance ◽  
Least Squares ◽  
Design Methodology ◽  
Gender Diversity ◽  
Ordinary Least Squares ◽  
Content Type ◽  
Audit Firm ◽  
Hierarchical Levels ◽  
And Gender ◽  
Practical Implications

Purpose This study aims to contribute to the literature by offering a different sector and emphasising the importance of females in audit firm (AF) governance on audit firm performance (AFP). Design/methodology/approach Ordinary least squares (OLS) and instrument variables regression (IVREG) with two-stage least squares are used to test the paper’s hypotheses. Findings Both OLS and IVREG estimation results show that both the proportion of females and gender diversity at board and owner levels and the total number of shares of female owners seem to enhance the performance of AFs. Practical implications These results may be important for policymakers and regulators to set a quota for women’s representation on AF governance or decide arrangements for women in AFs as in the regulations for the high hierarchical levels of other corporate firms. Originality/value This paper extends the current literature in the context of AFs in Turkey, positing that females in AF governance might enhance performance to a great extent.

Gender diversity and financial performance of Islamic banks

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Huthayfa Nabeel Jabari ◽  
Rusnah Muhamad
Keyword(s):  
Financial Performance ◽  
Least Squares ◽  
Gender Diversity ◽  
Estimation Method ◽  
Supervisory Board ◽  
Ordinary Least Squares ◽  
Least Squares Estimation ◽  
Islamic Banks ◽  
Content Type ◽  
Gender Diverse

Purpose The purpose of this paper is to examine the influence of gender diversity among the board of directors (BOD) and Shariah supervisory board (SSB) members on the financial performance of Islamic banks in Indonesia and Malaysia. Design/methodology/approach Data for a sample of 19 Islamic banks for the period 2010–2018 were collected to test the research hypotheses using pooled ordinary least squares estimation method. Generalized least squares estimation method was used to confirm that the results are robust. This study lagged the explanatory variables by one period to control for potential endogeneity. Findings The findings suggest that Islamic banks with more gender-diverse BOD and SSB are expected to have better financial performance. In addition, this paper finds that an increase in Islamic banks’ size may undermine the positive impact of gender diversity among SSB members on Islamic banks’ financial performance. Research limitations/implications This study was conducted only on Islamic banks in Indonesia and Malaysia owing to data constraints; thus, the results may not be generalizable to Islamic banks in other countries. Practical implications Improving financial performance is crucial for banks, especially for Islamic banks, to sustain their fast-growing share globally. Therefore, the findings of this study are expected to provide insight and understanding in the selection and appointment of BOD and SSB members at Islamic banks. Social implications By having women represented in the BOD and SSB, Islamic banks will benefit equally from valuable abilities across demographic groups in the society. Furthermore, if the members of the BOD and SSB are properly selected, Islamic banks with more gender-diverse boards can effectively contribute to enhancing social welfare of various segments in the society. Originality/value This is the first study, as far as is known to the authors, that provides empirical evidence on the influence of gender diversity among BOD and SSB members on the financial performance of Islamic banks. This paper is expected to be used as a reference by the shareholders and customers of Islamic banks in ensuring that the BOD and SSB have the best optimal composition that maximizes their profits.

Differentiating the impact of CSR strengths and concerns on firm performance

2017 ◽  
Vol 36 (3) ◽  
pp. 401-409 ◽  
Author(s):  
Albi Alikaj ◽  
Cau Ngoc Nguyen ◽  
Efrain Medina
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Latent Variables ◽  
Multinational Enterprises ◽  
Content Type ◽  
Future Studies ◽  
Domestic Firms ◽  
Firm Financial Performance ◽  
Individual Effects ◽  
The Impact

Purpose The purpose of this paper is to assess the Kinder, Lydenberg, Domini & Co. (KLD) dimensions by distinguishing between corporate social responsibility (CSR) strengths and concerns and examine their individual effects on firm financial performance. Additionally, the study distinguishes between US domestic firms and multinational enterprises (MNEs) to provide additional insights and explore if any differences exist. Design/methodology/approach Data from the KLD and Compustat databases are analyzed for a sample of 562 US firms, of which 359 are multinational corporations, and 203 operate solely in the USA. A path analysis was used to examine the effect of CSR strengths and concerns on firm financial performance. Findings The findings show that increases in CSR strengths as well reductions in CSR concerns are positively linked to firm financial performance. The results also suggest that addressing concerns would be more beneficial to MNEs as opposed to US domestic firms. Research limitations/implications First, it should be noted that this study is cross-sectional, thus limiting confirmation of causality. Future studies can confirm causality by conducting longitudinal analysis. Also, some country-specific regulations require firms to make certain CSR-related information publicly available. Future studies can focus on countries that have such regulations and make comparisons with countries that allow firms to decide for themselves whether or not to make CSR-related activities publicly available. Originality/value When measuring CSR, previous studies have combined the CSR strengths and concerns latent variables of the KLD database. This can potentially be a problem because CSR strengths and concerns are not meant to measure the same issues. By separating them into two distinct latent variables, the authors can better understand their individual effects on firm performance.

Corporate social responsibility and financial performance nexus

2018 ◽  
Vol 9 (3) ◽  
pp. 301-328 ◽  
Author(s):  
Joseph Dery Nyeadi ◽  
Muazu Ibrahim ◽  
Yakubu Awudu Sare
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Positive Impact ◽  
Public Investment ◽  
Data Set ◽  
Content Type ◽  
The Public ◽  
Firm Financial Performance ◽  
Corporate Social ◽  
The Impact

Purpose The paper aims to investigate empirically the impact of corporate social responsibility (CSR) on financial performance in South African listed firms. Design/methodology/approach The paper uses panel corrected standard errors to estimate the effect of CSR on firm financial performance and thus addresses contemporaneous cross-correlations across the panel cross sections. The study uses a broad base measure of CSR created by the Public Investment Corporation data set and the combination of accounting and economic means of measuring firm financial performance. Findings CSR is found to have a strong positive impact on firm financial performance in South Africa. When CSR is decomposed further into its major components, governance performance positively impacts a firm’s financial performance with no evidence of any relationship between social components and firm performance and between environmental components and firm performance. The positive impact of CSR on firm performance is greater in big firms. At the industry level, CSR is noticed to impact positively on financial performance in the extractive industry via good governance and responsible environmental behaviors. It however has no impact on firm performance in the financial sector. Research limitations/implications The results should be interpreted with caution and some limitations. Due to the limiting nature of the Public Investment Corporation data set (the survey was carried out on selected firms on the Johannesburg Stock Exchange for three years spanning from 2011 to 2013). This resulted in a sample of 56 firms. It is therefore very problematic to generalize the findings to a larger population over a long period of time. This is more limiting especially on individual sector studies where the sample has further shrunk to a smaller sample. As a result of the smaller sample size, the authors were unable to explore some other sectors which could have given more revealing findings. The authors recommend that future research should explore other data sets or use primary data approach that can allow for more sample size and elongated time period for a more holistic view and for easy generalization of the findings. The authors also identify an important lacuna necessitating further research effort. It would be interesting to empirically examine the threshold point of firms’ size beyond which CSR damages firms’ performance. Knowledge of this will guide managers of firms in their strategic CSR decision. Practical implications This study does not only serve as a reference work for subsequent investigations into the impact of CSR on firm performance in sub-Saharan Africa but also serves as a guide to policymakers on the financial impact of CSR adoption. Originality/value This study is one of the pioneering works that comprehensively examines the effect of CSR on financial performance amongst South African firms via size and sector and also controls for contemporaneous cross-correlation effects from the firms in the panel set.

Corporate governance guidelines compliance and firm financial performance

2016 ◽  
Vol 31 (8/9) ◽  
pp. 891-914 ◽  
Author(s):  
Erick Rading Outa ◽  
Nelson M. Waweru
Keyword(s):  
Corporate Governance ◽  
Life Cycle ◽  
Firm Performance ◽  
Financial Performance ◽  
Firm Value ◽  
Design Methodology ◽  
Content Type ◽  
Firm Financial Performance ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to examine the impact of compliance with corporate governance (CG) guidelines during the period 2002-2014 on firm financial performance and firm value of Kenyan-listed companies. Design/methodology/approach Using panel data of 520-firm year’s observations between 2005 and 2014, the authors test the hypothesis that compliance with CG guidelines issued in 2002 by Capital Markets Authority (CMA) improved firm financial performance and firm value. Findings Compliance with CG Index which is an aggregate of all the CG guidelines is positively and significantly related to firm performance and firm value. Board evaluation is also positively and significantly related to firm performance. The findings suggest that CG guidelines are associated with firm financial performance and firm value. Originality/value The authors provide evidence on the relationship between CG practices and firm financial performance and firm value in Kenya. Second, the authors provide evidence on board evaluation which has not been tested before in a “comply or explain” environment. Finally, they evaluate how CMA 2002 CG guidelines steered firm financial performance and firm value over its life cycle from 2002 to 2014. These results are important to CMA and other CG regulators and boards in their efforts to improve CG practices in the region.

scholarly journals The Interconnection between Decent Workplace and Firm Financial Performance through the Mediation of Environmental Sustainability: Lessons from an Emerging Economy

2021 ◽  
Vol 13 (8) ◽  
pp. 4570
Author(s):  
Muhammad Zahid ◽  
José Moleiro Martins ◽  
Haseeb Ur Rahman ◽  
Mário Nuno Mata ◽  
Syed Asim Shah ◽  
...  
Keyword(s):  
Financial Performance ◽  
Least Squares ◽  
Environmental Sustainability ◽  
Positive Impact ◽  
Ordinary Least Squares ◽  
Mediating Role ◽  
Firm Financial Performance ◽  
Development Goals ◽  
The Impact ◽  
The Relationship

This study aimed to investigate the impact of some important Sustainable Development Goals (SDGs), such as the decent workplace, climate change, and economic sustainability on firm financial performance (see Goals 8 and 13). By adopting an index from the previous literature, this study collected data from the annual and sustainability reports of the publicly listed companies of a developing country through content analysis from 2016 to 2018. The results revealed a significant increase in the level of compliance with workplace and environmental sustainability during the corresponding period. Furthermore, the estimations of ordinary least squares (OLS) and two-stage least squares (2SLS) panel data also unveiled a positive impact of workplace sustainability on the firm’s environmental and financial performance. Additionally, we noted that the findings were pronounced after addressing the problem of endogeneity. Moreover, the study also found a novel significant and positive mediating role of environmental sustainability in the relationship between workplace sustainability and the firm’s financial performance. This study has theoretical significance by proposing sustainability training and development as instrumental variables in the relationship of the workplace and environmental sustainability to firm financial performance. This study offers practical implications for regulatory bodies and business firms to integrate workplace and environmental sustainability practices into their routine operations for achieving sustainable industrialization.

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