scholarly journals Determinants of Companies’ Board Composition in Emerging Markets

2021 ◽  
Vol 12 (5) ◽  
pp. 17
Author(s):  
Leticia L. N. Bellato

This paper examines the determinants of female board representation for a sample of Brazilian listed companies for the year of 2018. Using count data models, we find that greater firm size, performance and board size lead to higher woman representation on companies’ boards. Also, that private control is associated with a lower number of women on boards. Most studies related to board composition focus on independent directors and are conducted in a developed countries’ setting. This work contributes to the extant literature in understanding what drives woman representation on corporate boards in an emerging market context and also would help to support the definition and implementation of gender diversity policies by showing possible impacts.

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christina Öberg

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.


2020 ◽  
Vol 13 (9) ◽  
pp. 218
Author(s):  
Marek Gruszczyński

This paper discusses questions of the gender diversity of corporate boards vis-à-vis firm performance. Typically, researchers have asked if a female presence is associated with improved performance and more transparent governance. The paper’s first part reports on several econometric attempts in the quest to prove the existence of such an association. The primary outcome is that the results vary over geographical, cultural, and time settings. The study presented in the second part examines European firms’ annual reports from 2015. Binomial models, multiple regression, and quantile regression are applied resulting in the finding that female presence on a board is not significantly related to firm performance for this sample. Together with the picture that emerged from the paper’s first part, this result leads to the possibility that the search for an association between women on boards and company performance is not fundamental. Nevertheless, modern business societies worldwide may need to boost the female presence on managerial bodies. Current econometric evidence indicates that this is not harmful to corporate results.


2004 ◽  
Vol 49 (2) ◽  
pp. 209-237
Author(s):  
Ronald C. Anderson ◽  
David M. Reeb

We examine the mechanisms used to limit expropriation of firm wealth by large shareholders among S&P 500 firms with founding-family ownership. Consistent with agency theory, we find that the most valuable public firms are those in which independent directors balance family board representation. In contrast, in firms with continued founding-family ownership and relatively few independent directors, firm performance is significantly worse than in non-family firms. We also find that a moderate family board presence provides substantial benefits to the firm. Additional tests suggest that families often seek to minimize the presence of independent directors, while outside shareholders seek independent director representation. These findings highlight the importance of independent directors in mitigating conflicts between shareholder groups and imply that the interests of minority investors are best protected when, through independent directors, they have power relative to family shareholders. We argue that expanding the discussion beyond manager-shareholder conflicts to include conflicts between shareholder groups provides a richer setting in which to explore corporate governance and the balance of power in U.S. firms.


2019 ◽  
Vol 10 (2) ◽  
pp. 144-166
Author(s):  
Nadia Loukil ◽  
Ouidad Yousfi ◽  
Raissa Wend-kuuni Yerbanga

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.


Author(s):  
Qaiser Rafique Yasser ◽  
Abdullah Al-Mamun

Gender diversity is a new and challenging issue of research in business. Women on boards are a heavily discussed topic in developed countries, though this issue has recently appeared to gain the attention of researchers in developing economies as well. However, research on gender diversity in Malaysia is limited. This study aims to examine whether female directors on boards can affect firm performance based on selected public listed companies in Malaysia. In examining the effect of gender diversity on firm performance, Pearson correlation coefficient and regression analysis tests are employed using economic value added (EVA) as a measurement tool. This study found no relationship between gender diversity and firm performance. Given this, future studies should try to consider other aspects of corporate governance.


2020 ◽  
Vol 5 (16) ◽  
pp. 19-34
Author(s):  
Emma Anuar ◽  
Rozainun Abdul Aziz ◽  
Maslinawati Mohamad ◽  
Rugayah Hashim

The objective of this paper is to review the literature on how board gender diversity impacts dividend payout among public listed companies in Malaysia. Traditionally, higher-level management positions are held by men. Leadership and decision making are predominantly male, while the minority are women directors. When corporate boards show diversity, there is a significant presence of women or the addition of women to the board. In the past, present, and indeed the future, board gender diversity is the issue that is a growing trend and is getting more attention. The shareholders and investors are putting pressure on the boards of directors’ to show increased performance. The findings from this paper will provide evidence on whether board gender diversity influences the dividend payout. Board composition without gender discrimination is the new normal for corporations to thrive after the global lockdowns from Covid-19. Other relevant matters on the impact of board gender diversity will also be discussed.Keywords: board gender diversity; board characteristics; board composition; board traits; female directors; dividend payout; MalaysiaeISSN: 2514-7528 © 2020 The Authors. Published for AMER ABRA cE-Bs by e-International Publishing House, Ltd., UK. This is an open-access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer–review under responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians) and cE-Bs (Centre for Environment-Behaviour Studies), Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia.DOI: https://doi.org/10.21834/jabs.v5i16.350


2020 ◽  
Vol 4 (2) ◽  
pp. 205-220
Author(s):  
Haseeb Ur Rahman ◽  
Muhammad Zahid ◽  
Muhammad Jehangir

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.


2018 ◽  
Vol 56 (8) ◽  
pp. 1769-1786 ◽  
Author(s):  
Varnita Srivastava ◽  
Niladri Das ◽  
Jamini Kanta Pattanayak

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.


2017 ◽  
pp. 65-76 ◽  
Author(s):  
Anh Vo Thi Thuy ◽  
Khanh Bui Phan Nha

This paper focuses on the impact of board gender diversity on firm performance. Using a sample of 880 listed firms in 10 developed countries covering a nine year period, we find that gender diversity has a negative effect on firm market performance. The result is consistent when different robustness checks are employed. A negative correlation can be explained by the fact that the presence of women on boards increases monitoring function. When the investors’ rights are well protected by the legal system, this extra monitoring may be costly for firms. This finding suggests that a quota for the exact anticipation of female directors on boards should be carefully considered.


2018 ◽  
Vol 37 (1) ◽  
pp. 1-12 ◽  
Author(s):  
John Dobson ◽  
Mahdi Rastad ◽  

In recent years, the US, UK, and Continental Europe have pursued board gender diversity through markedly different means. Several European countries have imposed mandatory quotas, whereas the UK and US are relying on the endogenous mechanisms of social pressure and shareholder proposals respectively. Despite their obvious allure as a means of bringing about rapid change, evidence is mounting that European board gender diversity quotas may yield various deleterious side effects; and quotas may not be as successful in their core aim of promoting gender diversity as initial broad statistical measures indicated. In this paper we critique the European quota regime, and consider US shareholder proposals as an alternative change mechanism for improving gender diversity in corporate boards. We note the lack of shareholder representative democracy in Europe and conclude with the policy recommendation that, rather than extending quotas, European governments should focus on empowering shareholders.


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