Critical mass and voice: Board gender diversity and financial reporting quality

Dobija, Dorota; Hryckiewicz, Aneta; Zaman, Mahbub; Puławska, Karolina

doi:10.1016/j.emj.2021.02.005

Cited by 98 publications

(90 citation statements)

References 64 publications

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“…Moreover, the mean value of firm size (FirSIZE) and firm age (FirAGE) are 6.14 and 26 years, respectively, while the value of leverage in our sample is 2.34%, whereas profitability (Prof) is 48.09% and liquidity (Liq) is 2.66%. These previous results are consistent with prior studies in FLID, for example, Abed and Al-Najjar (2016), Campbell and Mínguez-Vera (2008), Dobija et al (2021) and Elfeky and Fang (2018).…”

Section: Resultssupporting

confidence: 93%

“…gender diversity sample is 2.34%, whereas profitability (Prof) is 48.09% and liquidity (Liq) is 2.66%. These previous results are consistent with prior studies in FLID, for example, , Campbell and Mínguez-Vera (2008), Dobija et al (2021) and Elfeky and Fang (2018).…”

Section: Boardroomsupporting

confidence: 93%

“…where BLAU_index represents the percentage of gender diversity in the boardroom, its value ranges from 0 to 0.50. If a boardroom is exclusively male or female, the Blau index will be 0, and it will be 0.5 when the board comprises an equal number of men and women (Campbell and Mínguez-Vera, 2008; Dobija et al , 2021); other control variables were measured as explained in Table 1.…”

Section: Methodsmentioning

confidence: 99%

See 2 more Smart Citations

Narrative forward-looking information disclosure, do ownership concentration, boardroom gender diversity and cultural values matter? A cross country study

Abdallah

Eltamboly

2022

MAJ

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Purpose This study aims to identify the main factors that drive the differences in the levels of forward-looking information disclosure (FLID) across four countries. This study goes beyond the firm-specific characteristics to the countries-specific factors to explain the observable differences in the level of FLID among the UK, Italian, Hong Kong and Chinese American Depositary Receipts (ADRs) firms trading in US Exchanges. Design/methodology/approach To validate the levels of FLID, corporate financial information environment (CFIE)-final reports structure extractor (FRSE) was conducted on the annual reports of a sample of 353 listed firm observations in 2020 across four different countries. Also, the ordinary least square regression model was used to examine the proposed relationships. Findings The empirical results indicate that the level of FLID is highest among the Chinese ADRs firms trading in US Exchanges and UK listed firms. Also, ownership concentration and gender diversity have a positive correlation with the level of FLID. Additionally, long-term orientation positively influences the level of FLID. Considering the moderation effect of power distance and masculinity dimensions, countries with larger power distance tend to have a lower impact of ownership concentration on the level of FLID, whereas countries with higher masculinity tend to have a lesser positive relationship between gender diversity and the level of FLID. Originality/value Notwithstanding, this study provides novel and persuasive evidence regarding the effects of firm- and country-specific characteristics as possible determinants of forward-looking disclosures, drawing on evidence from international companies with free floats, boards with female quotas and cultural values including masculinity and long-term orientation. This work offers unique insights from the upper echelons lens, which implies that firms need to obtain a critical mass of gender diversity to achieve a more balanced forward-looking perspective on their annual reports.

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Section: Resultssupporting

confidence: 93%

Section: Boardroomsupporting

confidence: 93%

Section: Methodsmentioning

confidence: 99%

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Narrative forward-looking information disclosure, do ownership concentration, boardroom gender diversity and cultural values matter? A cross country study

Abdallah

Eltamboly

2022

MAJ

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“…Prior empirical studies generally have found a negative relationship between female directors and earnings management. Gender diverse boards are associated with voluntary monitoring (Pucheta‐Martinez & Bel‐Oms, 2019), strong environmental policies (Li et al, 2017), more extensive sustainability reporting and higher reporting quality and less earnings management (Arun et al, 2015; Dobija et al, 2021; Helfaya & Moussa, 2017; Tingbani et al, 2020). Hence, similar to firms' investment in carbon assurance and carbon disclosure, we control for board gender diversity as a potential driver of earnings management.…”

Section: Methodsmentioning

confidence: 99%

Climate change mitigation: Carbon assurance and reporting integrity

2021

Self Cite

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Concern about climate change has increased the pressure on firms to be accountable for social impact and to report on environmental, social and governance (ESG) performance. Focusing on the view that sustainability-oriented firms are likely to consider wider stakeholder interests and pursue high financial reporting integrity, this paper examines the association between carbon assurance and earnings management.Using a sample of firms listed on the New York Stock Exchange, we find voluntary adoption of carbon assurance (level), carbon disclosure and gender diverse boards are negatively associated with earnings management. Additional tests using different components of carbon assurance (percent and verification) confirm our main results.Our results suggest that firms that voluntarily invest in carbon assurance, carbon disclosure and gender diverse boards are less likely to engage in earnings management and thus have higher reporting integrity. This aligns with the view that firms' ethical concerns translate into higher quality reporting.

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“…Aygun et al (2014) suggest a positive association between board size and the quality of accounting information, measured by Jones (1991) and Dechow et al (1995) models, in a Turkish setting. Using the Polish data, Dobija et al (2021) find that board size has a positive impact on FRQ, measured by Jones (1991) and Dechow et al (1995) models, owing to more wisdom, valuable experience and diverse background. However, Alnabsha et al (2018) argue that board size is negatively related to the level of corporate disclosures in Libya.…”

Section: Board Compositionmentioning

confidence: 99%

Corporate governance and financial reporting quality: a comparative study

Hasan

Aly

Hussainey

2022

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Purpose This paper aims to investigate the impact of corporate governance on financial reporting quality (FRQ) in Pakistan and the UK. Design/methodology/approach In this paper, three accrual-based models are used to analyse FRQ for a sample of 1,550 firm-year observations, including 78 Pakistani firms and 77 UK firms, for the period 2009–2018. Findings The analysis shows that board size has a negative impact on FRQ while foreign ownership has a positive impact for Pakistani and UK firms. It also shows that board independence has a positive impact on FRQ of Pakistani firms, while board meetings frequency and audit committee independence have a negative impact. We make no such observation for UK firms. In addition, the analysis shows that board gender diversity and ownership concentration negatively affect FRQ of UK firms. This study makes no such observation for Pakistani firms. Research limitations/implications Due to the study’s focus on Pakistani and UK firms, the findings may not be generalizable to other developed and emerging economies. Practical implications The findings provide valuable insight to policymakers, regulators and investors by suggesting that the impact of board composition on FRQ of both Pakistani and UK firms is weak. The findings suggest that board size and foreign ownership are the attributes that require regulatory focus to increase FRQ. The negative impact of audit committee independence on FRQ induces rethinking among the policymakers in Pakistan and calls for fully independent audit committees. Originality/value To the best of the authors’ knowledge, this is the first research endeavour to compare the context of a developed and an emerging economy regarding the impact of corporate governance on FRQ. It also contributes to the governance literature by using three measures of FRQ and a comprehensive set of corporate governance attributes.

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Critical mass and voice: Board gender diversity and financial reporting quality

Cited by 98 publications

References 64 publications

Narrative forward-looking information disclosure, do ownership concentration, boardroom gender diversity and cultural values matter? A cross country study

Narrative forward-looking information disclosure, do ownership concentration, boardroom gender diversity and cultural values matter? A cross country study

Climate change mitigation: Carbon assurance and reporting integrity

Corporate governance and financial reporting quality: a comparative study

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