Determinants of Executive Compensation

The object of this research focuses on executive compensation, which is a form of appreciation for the agent’s contribution as the party responsible for the company performance and the improvement of the walfare of the principals. The aims of this study is to determine the effect of profitability and leverage on executive compensation in non financial companies listed in Indonesia Stock Exchange for the period 2017 – 2019. Population of this study is non financial companies listed in Indonesia Stock Exchange for the period 2017 – 2019 with a sample by non financial listed in Kompas100 index to represent the existing population. Independent variables used in this study are profitability which is measured by return on assets (ROA) and leverage which is measured by debt to equity ratio (DER). Dependent variable used in this study is executive compensation which is measured by total remuneration of president director. This study also used control variables such as executive age, executive gender and executive tenure. The sampling method of this study is a purposive sampling. The research model used is panel data with fixed effect model approach. The findings have shown that profitability has a negative significant effect on executive compensation. It is also noted that the lower level of the company’s debt, the larger the amount of executive compensation. These findings shed the light on research on agency theory that compensation on performance is not valid in Indonesia.

What’s It Like Inside the Hive? Managerial Discretion Drives TMT Gender Diversity of Women-Led Firms

Do women promote other women? We investigate this question through the lens of gender role theory and managerial discretion. While the trickle-down effect suggests that women in positions of power are likely to promote other women, the queen bee phenomenon indicates that senior women distance themselves from other women. We argue these two conflicting perspectives have developed because (a) much of the literature has considered the influence of board gender representation on top management team (TMT) gender representation, ignoring the role of the CEO, and (b) an important tenet of the queen bee phenomenon has been overlooked in that women who perceive an ability to challenge traditional gender norms are less likely to engage in queen bee behavior. Thus, we suggest women CEOs, who are in a unique position of both importance and isolation, are less likely to promote other women to the TMT due to the gendered context in which they are employed, but as the CEO’s capacity to enact change (i.e., managerial discretion) increases, so too does their ability to challenge traditional gender norms. More specifically, we hypothesize and find that while the presence of women CEOs negatively relates to the proportion of women on the TMT, this relationship is weakened by CEO power, lack of board vigilance, and environmental munificence. Post hoc analyses demonstrated that while a trickle-down effect occurs from the board to the TMT, these mechanisms may not exist at the CEO-TMT interface, highlighting the importance of considering the role of CEO discretion in enhancing executive gender diversity.

Executive Gender and Firm Environmental Management: Evidence from CFO Transitions

We investigate whether female executives influence corporate environmental management (green management). Based on a difference-in-difference approach, our study provides evidence that female CFOs conduct more environmentally responsible activities, and the effects are more prominent when firms are of high risks. Female CFOs are more likely to involve in environmental management voluntarily. Further, environmental management improves firm performance such as debt cost saving. This research advances the gender diversity literature and suggests that female executives play an important role in corporate decisions and firm performance.

Board/Executive Gender Diversity and Firm Financial Performance in Canada: The Mediating Role of Environmental, Social, and Governance (ESG) Orientation

The objective of this study is to verify the effect of gender diversity on the board of directors (BD) and the executive committee (EC) of participating Canadian firms with regard to the financial performance and the mediating role of environmental, social, and governance (ESG) orientation in this relationship. The study sample was composed of 133 Canadian firms, and the data cover an 18 year timeline (2002–2019), with 925 observations. This paper provides empirical support for the effect that gender diversity in turnover has on the financial performance of firms and explains 53% of its variance. In addition to supporting the beneficial effect of gender diversity on performance, the study reveals the mediating mechanism through the ESG orientation of companies explaining almost 4% of the total effect of gender diversity on performance. By analyzing two levels of diversity, the study revealed the superiority of the effect of gender diversity in BDs as compared to ECs. We discuss the theoretical and empirical implications of the results found, as well as the limitations and future prospects of research on the subject.

Does the chief audit executive gender matter to internal audit effectiveness? Evidence from Tunisia

Purpose The purpose of this paper is to investigate whether chief audit executive (CAE) gender has a significant impact on the internal audit function (IAF) effectiveness as proxied by the extent to which the internal audit function uses quality assurance techniques. Design/methodology/approach This study uses a multivariate regression model to analyze the association between CAE gender and the use of quality assurance techniques in fieldwork as a proxy for IAF effectiveness. Data were collected using a survey of 74 internal auditors from Tunisian listed companies. Findings The results indicate that IAFs run by a female CAE are more likely to incorporate quality assurance techniques into fieldwork than IAFs run by male CAEs. Therefore, internal audit departments managed by women tend to be more effective. Practical implications Findings highlight to regulators and reform advocates the importance of having women on the CAE position will improve internal audit practices’ quality. Thus, the gender difference in internal auditing should be more strongly emphasized in different cultural and economic contexts. Originality/value This study provides new insights which add to the existing gender literature by introducing a North African perspective and simultaneously providing new insights that highlight the importance of having women on top management positions in internal auditing and the positive effects which come with it.

Management Compensation, Gender Diversification, and Executive Preferences on Tax Avoidance of IDX Manufacturing Companies

This study aims to analyse the effect of management compensation, gender diversification, and executive preferences on tax avoidance practices in Indonesia Stock Exchange (IDX). Conceptually, this study uses mediating variables of executive gender diversification and executive preferences in the relationship between management compensation and tax avoidance. This study uses balanced panel data with a total of 404 observations from manufacturing companies listed on the Indonesia Stock Exchange in the 2015-2018 period. The results showed a negative assessment of management compensation on tax avoidance. However, further examination revealed that management compensation will positively influence tax avoidance if compensation is given to the board of directors who have gender diversification characteristics in the composition of their members indicated by at least one female director on the board of directors. Lastly, the greater the management compensation given to executives who have risk taker characteristics will also make directors to do greater tax avoidance.