Women on boards in India: a need or tokenism?

2018 ◽  
Vol 56 (8) ◽  
pp. 1769-1786 ◽  
Author(s):  
Varnita Srivastava ◽  
Niladri Das ◽  
Jamini Kanta Pattanayak
Keyword(s):  
Gender Diversity ◽  
Positive Association ◽  
Regulatory Reform ◽  
Corporate Boards ◽  
Content Type ◽  
Level Of Involvement ◽  
Female Directors ◽  
Women On Boards ◽  
The Right ◽  
The Impact

Purpose The purpose of this paper is to examine the significance of gender diversity on corporate boards in India in the light of recent regulatory reform introduced in the Companies’ Act, 2013 which mandated the presence of at least one woman on the corporate boards of all the listed firms. Design/methodology/approach Based on a panel of 300 firm-year observations for 15 years from 2001 to 2015, regression analysis has been conducted to analyze the relation between gender-related variables of corporate boards with firm-specific financial characteristic, cost of equity (COE) and return on assets (ROA) of firms listed in CNX Nifty, a major financial market index of India. Findings The analysis indicates that boards with gender diversity explain a slightly more than 5.5 percent change in a firm’s COE and have a much higher impact of 45 percent on a firm’s ROA. The presence of female directors on the boards and their independence have a negative association with the COE, whereas the level of involvement of female directors on different committees has a positive association with the ROA. Practical implications The findings may help theorists in defining the right mix of female on the corporate boards in an emerging economy. Also, by taking input from the findings, regulators and industry can formulate policies to foster gender diversity on corporate boards in India. Originality/value This study considers the recent regulatory norm introduced in India. This issue has still not been discussed and analyzed by researchers in India. It attempts to explain the impact a gender diverse board can make on a firm’s performance. It also makes valuable recommendations to improve the norms intended to more effectively foster gender diversity on corporate boards in India.

scholarly journals Does Board Gender Diversity Bring Better Financial and Governance Performances? An Empirical Investigation of Cases in Taiwan

2020 ◽  
Vol 12 (8) ◽  
pp. 3205 ◽  
Author(s):  
Yu-Hui Wang
Keyword(s):  
Corporate Governance ◽  
Gender Diversity ◽  
Critical Factor ◽  
Positive Association ◽  
Theoretical Argument ◽  
Corporate Boards ◽  
Research Attention ◽  
Female Directors ◽  
Board Gender Diversity ◽  
The Impact

Gender diversity, one of the core streams of top management team (TMT) diversity research, poses a theoretical argument valuable for firms—whether gender diversity among board members can lead to improved performance. Increased research attention on the relationship between gender diversity and the financial and governance performance of firms has produced inconclusive results. This study shapes the gender diversity of corporate boards by defining six compounding elements, which is the major contributor to the literature of gender diversity. This study aims to provide a more complete and precise assessment of the impact of gender diversity on a firm’s performance and corporate governance performance from the Taiwanese experience. The evidence in Taiwan suggests that increased board gender diversity does not have a positive effect on financial and governance performance. Only the ratio of female independent directors is found to have a significantly positive association with a firm’s performance, supporting prior findings that directors with greater independence are better able to perform their monitoring function and thus contribute to performance. The results also demonstrate that female directors having concurrent posts is a critical factor in enhancing corporate governance performance. Female directors with prior experience as serving directors or supervisors in other companies can offer diverse opinions and network ties, thus contributing to improved cohesion and corporate governance. The findings of this research can contribute to both literature and practice in board gender diversity issues and can serve as an empirical basis for enterprises in optimizing their board composition.

Does gender diversity on boards reduce information asymmetry problems? Empirical evidence from the French market

2019 ◽  
Vol 10 (2) ◽  
pp. 144-166
Author(s):  
Nadia Loukil ◽  
Ouidad Yousfi ◽  
Raissa Wend-kuuni Yerbanga
Keyword(s):  
Asymmetric Information ◽  
Stock Market ◽  
Gender Diversity ◽  
Market Liquidity ◽  
Idiosyncratic Volatility ◽  
Independent Directors ◽  
Corporate Boards ◽  
Content Type ◽  
Bid Ask Spread ◽  
The Impact

Purpose The purpose of this paper is to investigate the effect of female members in boards of directors on asymmetric information in the French stock market. Design/methodology/approach The authors use two proxies for asymmetric information: the idiosyncratic volatility and the bid-ask spread. This study is conducted on all listed firms in the SBF 120 index between 2002 and 2012. Findings Results show that gender diversity in boardrooms has a negative effect on the level of private information in stock markets and reduces the bid-ask spread. However, these effects are significant in family-controlled firms: female inside directors significantly increase the idiosyncratic volatility and the bid-ask spread, while female independent directors decrease both proxies for stock market liquidity. Research limitations/implications Our empirical findings contribute to the current debate on the benefits of gender diversity on corporate boards from the market perspective. It shows that, under specific conditions, financial markets could be receptive to the presence of female directors in boardrooms. Practical implications Practitioners and policymakers advocate the benefits of gender diversity on corporate boards. This paper shows that when the protection of minority shareholders is poor, the stock market is receptive to the presence of women independent directors, only in family controlled firms. This is a further argument that could help women to overcome glass-ceiling barriers they usually face to achieve top management positions. Originality/value This paper provides support for the increased attention paid to gender-diverse boards. It addresses the market sensitivity toward the presence of women members in French boardrooms and their positions. This is the first paper, to the best of our knowledge, to address how appointing women to different positions in the boardroom could provide signals to investors in the presence of asymmetric information. French firms are mostly family controlled. Thus, the findings bring valuable information of the impact of board diversity on the stock market considering family and nonfamily firms.

scholarly journals Women on boards and monitoring tasks: an empirical application of Kanter's theory

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sara De Masi ◽  
Agnieszka Słomka-Gołębiowska ◽  
Andrea Paci
Keyword(s):  
Design Methodology ◽  
Corporate Boards ◽  
Ongoing Debate ◽  
Content Type ◽  
Female Directors ◽  
Women On Boards ◽  
Board Monitoring ◽  
Women On Corporate Boards ◽  
The Relationship ◽  
Practical Implications

PurposeThis paper examines the relationship between women on boards and board monitoring tasks depending on group categories identified in the Kanter's theory.Design/methodology/approachUsing a sample of the largest listed companies in Spain, Italy and France during the period 2007–2017, this study tests the effect of women's presence based on the following board categories: (1) skewed boards with a percentage of women that is less than 20%; (2) tilted boards with a percentage of women that ranges from 20% to 33%; (3) tilted boards with a percentage of women that is more than 33%; and (4) balanced boards with an equal or quasi-equal gender distribution. The authors use the case of the gender board quota regulation in different European Union countries.FindingsThe results suggest that tilted boards engage in stronger firm monitoring and that the effect of women on board monitoring tasks is positive and statistically significant when the percentage of female directors reaches the threshold of 33%.Practical implicationsThe outcomes of this study help policymakers identify the minimum threshold that quota regulations should mandate in order for boards to be effective.Originality/valueThis paper moves forward the ongoing debate about the effect of women on corporate boards, shifting the focus from the ratio or presence of female directors to the size of the group they form within the board. To the best of authors’ knowledge, this is the first study to test Kanter's theory by investigating the relationship between women on boards and board monitoring.

scholarly journals Does gender diversity on the board reduce agency cost? Evidence from Pakistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali Amin ◽  
Ramiz Ur Rehman ◽  
Rizwan Ali ◽  
Collins G. Ntim
Keyword(s):  
Gender Diversity ◽  
Business Environment ◽  
Agency Cost ◽  
Agency Conflicts ◽  
Content Type ◽  
Listed Firms ◽  
Financial Firms ◽  
Female Directors ◽  
Board Gender Diversity ◽  
The Impact

Purpose This study aims to examine the effects of board gender diversity on agency costs in non-financial firms listed on the Pakistan Stock Exchange (PSX). Design/methodology/approach Multiple regression analysis is used to determine the impact of board gender diversity on agency cost. The research used panel data consisting of 2,062 firm-year observations of 226 non-financial firms listed on the PSX from 2008 to 2019 to test the proposed hypothesis. In addition, the Blau and the Shannon indices were used to checking for robustness. Findings The results indicate that female presence on the board significantly reduces the agency cost and, hence, mitigates the principal-agent conflict. Moreover, consistent with the critical mass theory, it was found that boards with three or more female directors have a stronger impact on reducing the agency cost, as compared to two or fewer female directors on the board. Research limitations/implications The sample was restricted to non-financial firms listed on the PSX only; therefore, the results reflect the attributes of Pakistan’s business environment. A similar analysis in the context of other countries may generate different results. Practical implications The findings imply that female directors play an important role in reducing agency conflicts between shareholders and managers by enhancing monitoring through effective governance mechanisms. The policymakers, therefore, should focus on female career development and encourage professional training programmes to generate a fair, competitive environment for senior female management. Originality/value This study attempts to fill the literature gap in that no similar study covers the non-financial firms’ listed firms in Pakistan. The paper supports the reforms made by the code of corporate governance by making the placement of female directors mandatory on Pakistani corporate boards. Overall, support is provided for the view that regulators should favour gender quotas regarding the composition of the board management team of listed firms to reduce agency conflicts and gain shareholder confidence.

Would diversified corporate boards add value? The case of banking institutions in Malaysia

2018 ◽  
Vol 10 (2/3) ◽  
pp. 218-228 ◽  
Author(s):  
Ribed Vianneca W. Jubilee ◽  
Roy W.L. Khong ◽  
Woan Ting Hung
Keyword(s):  
Firm Value ◽  
Banking Sector ◽  
Gender Diversity ◽  
Governance Structure ◽  
Corporate Boards ◽  
Board Diversity ◽  
Content Type ◽  
Banking Institutions ◽  
The Government ◽  
The Impact

Purpose Board diversity has gained increasing attention and has been widely posited as a driver for firm value. The purpose of this paper is to provide empirical evidence on the relation of gender diversity of corporate boards with the value of banking institutions in Malaysia. Design/methodology/approach The sample comprised of ten banking institutions listed on Bursa Malaysia with data observations from 2007 to 2016. Panel data techniques were employed to investigate the relationship between having female directors and firm performance in terms of values generated as indicated by Tobin’s Q. Findings The results revealed a positive relationship between the proportion of female director and the value of the bank. Interestingly, this study found that appointment of female independent directors tends to be negatively related to the value of such institutions. Practical implications There remains a shortage of research studying the impact of gender equality on corporate boards in Malaysia generally and in the banking sector specifically. Thus, this study contributes a significant knowledge on the value implication of board diversity. The findings also provide useful insights on the developmental policy initiated by the government to increase female participation in the top management. Originality/value This study contributes to the literature by bridging the knowledge gap on board diversity in the governance structure of banking institutions. It also provides theoretical contributions to the development of regulatory policy in relation to gender diversification in corporate leadership.

Women directors and IPO underpricing: evidence from Indian markets

2015 ◽  
Vol 30 (3) ◽  
pp. 186-205 ◽  
Author(s):  
Rekha Handa ◽  
Balwinder Singh
Keyword(s):  
Developing Countries ◽  
Corporate Governance ◽  
Gender Diversity ◽  
Corporate Boards ◽  
Women Directors ◽  
Ipo Underpricing ◽  
Content Type ◽  
Gender Balance ◽  
Female Directors ◽  
Gender Diverse

Purpose – This paper aims to fill the gap of the relatively under-researched impact of women directors on initial public offering (IPO) underpricing in developing countries. Gender diversity is an important emerging issue within the corporate governance literature. Recently, there has been a growing thrust on gender-diverse boards. However, their proportion on corporate boards is low worldwide. The paper examines the influence of women directors on the underpricing phenomenon pervasive in the IPO context. Design/methodology/approach – Gender diversity is an important emerging issue within the corporate governance literature. Recently, there has been a growing thrust on gender diverse boards. However, their proportion on corporate boards is low worldwide. The impact of women directors on IPO underpricing in developing countries remains relatively under-researched. This paper aims to fill this gap in research. The paper examines the influence of women directors on the underpricing phenomenon pervasive in the IPO context. Findings – The results suggest that the subscription ratio, listing delay and block holder ownership positively influence raw returns and market-adjusted excess returns. The proportion of women directors showed negative non-significant impact on both type of returns. We did not find evidence of the other explanatory variables included in the model. Research limitations/implications – The relatively low proportion of female directors may be the reason for some of the non-significant findings. Future research with a good gender balance on boards is likely to help generalising the findings. Other confounding factors also need to be included in the model for deeper explanations of the phenomenon. Practical implications – The study highlights the existence of a “glass ceiling” in Indian corporate settings, where women have to make a tough fight. This barrier must be removed to unleash the real talent of women as directors and see this talent reflected in returns. Social implications – The paper highlights both the need to better manage the gender balance in corporate board rooms and the need to incorporate women’s talents in corporate and investment decisions. Originality/value – The paper highlights the significant gender gap in IPO directorial positions in developing countries such as India. It explores female directors’ contributions in initial pricing performance, which remain unaddressed in this part of the world. Insights into this sensitive issue in an emerging economy such as India can provide important inputs.

scholarly journals Different is Better: Does Difference in Age and Ethnicity of the Directors Matter for Corporate Performance in Malaysia?

2020 ◽  
Vol 4 (2) ◽  
pp. 205-220
Author(s):  
Haseeb Ur Rahman ◽  
Muhammad Zahid ◽  
Muhammad Jehangir
Keyword(s):  
Middle Age ◽  
Gender Diversity ◽  
Positive Association ◽  
Developed Countries ◽  
Share Price ◽  
Corporate Boards ◽  
Significant Positive Association ◽  
Key Stakeholders ◽  
The Developed Countries ◽  
The Impact

The prior diversity-related literature is mostly dominated by the boardroom gender diversity of the top or large companies of the developed countries. Consequently, this study investigates the impact of the rarely investigated boardroom diversity-related dimensions like directors’ age and ethnicity on the financial performance of 360 randomly selected non-financial listed companies from a developing country - Malaysia from 2010 to 2014. The findings revealed that ethnic equality (the presence of directors from all the three major ethnicities of the country) on the board has a significant positive relationship with ROA and share price. However, directors’ age has a significant positive association with share price but it has an insignificant effect on ROA. The findings of this study provide important insights for the regulators, policymakers, and all other key stakeholders of the developing countries, especially Malaysia, where the corporate boards are mostly dominated by men of middle age from Chinese ethnicity.

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.

Women on board: the disregarded issue of board interlocks

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christina Öberg
Keyword(s):  
Literature Review ◽  
Board Member ◽  
Gender Diversity ◽  
Board Members ◽  
Corporate Boards ◽  
Content Type ◽  
Board Interlocks ◽  
Women On Boards ◽  
Board Representation ◽  
The Individual

Purpose Gender diversity is extensively debated and researched in relation to corporate boards. The focus on the gender composition on single boards neglects an important issue: that of how the power of board members is impacted by their representation on other boards. Board interlocks refer to how a board member is also represented on other companies’ boards, and such representation expectedly makes the individual board member more influential in the boardroom than non-connected board members. The purpose of this paper is to investigate whether and how female board interlocks are considered in previous research on gender diversity on boards. Design/methodology/approach A systematic literature review was conducted. It comprised 71 highly cited articles. The articles were analyzed to grasp their content, and specifically, female influence in the boardroom related to power. Findings The literature review reveals that the interlock perspective is rare in studies on women’s board representation. This is so, even while evidence is provided that females often need companions to get their meanings across on the boards, despite how interlocks would create one link of such power, and although the literature points to how female board representation plays a part to explain performance, social responsibilities and overall strategic directions of firms. Originality/value Contributions are made to previous research by indicating the potential of further research in a largely neglected area of research while also summarizing the previous reporting on women on boards.

Female board directorship and earnings management

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yosra Mnif ◽  
Imen Cherif
Keyword(s):  
Earnings Management ◽  
Family Firms ◽  
Gender Diversity ◽  
Corporate Boards ◽  
Women Directors ◽  
Homogeneous Sample ◽  
Content Type ◽  
Gender Diverse ◽  
Gender Quota ◽  
The Impact

Purpose This paper aims to examine the impact of female board directorship on the extent of earnings management. Design/methodology/approach The research hypotheses have been tested using both univariate and multivariate analyzes based on a sample of 198 firm-year observations from closely-held family firms listed on the SBF 120 over the period 2010–2018. Findings The empirical results first indicate that female board participation reduces the level of earnings management. When looking at women positions in the companies’ boardrooms, the authors reveal that the negative linkage between female board directorship and earnings management remains constant for independent female directors while the opposite holds for their family-affiliated counterparts. Further, the gender quota reform is shown to mitigate the adverse relationship between gender-diverse corporate boards and the extent of earnings management. These results seem sound, as they hold unchanged for the several measures of, both, boardroom gender diversity and earnings management used in the empirical study. In a supplementary analysis, the authors provide evidence that the association between the presence of women directors on the companies’ boards and earnings management depends, in a different way, on the size of the audit firm in a joint auditing context. Originality/value The country and the period considered in this paper are noteworthy characteristics that enhance the value of this research. The present study is relevant because it examines the relationship between female boardroom participation and earnings management using a homogeneous sample of family-owned and -managed companies within which shareholders and board members share identical motives for manipulating earnings in one of the leading countries in the world with regard to family ownership dominance (i.e. France). Moreover, this paper is considered to be very timely, as it explores, contrarily to previous related studies, the years following the implementation of a mandatory gender quota reform in one of the less available countries, to date, that have amended a gender quota law. To the knowledge, besides France, there are a few markets (Norway, Belgium, Finland and Iceland) that have implemented such legislation.

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