Diversity in the board of directors and good governance practices

Melón-Izco, Álvaro; Cabestre, Francisco Javier Ruiz; Ruiz-Olalla, M. Carmen

doi:10.17811/ebl.9.2.2020.97-105

Cited by 7 publications

(7 citation statements)

References 40 publications

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“…Nonetheless, female directors act as an efficient monitor to restrict tax aggressiveness. Consistent with the prior studies, we also argue that female director improves financial reporting quality (Adams & Ferreira, 2009) and promote good governance practices in an organization (Melón-Izco et al, 2020) through which they curb tax planning motives (Lanis et al, 2015;Richardson et al, 2016). However, the monitoring role of female directors in the presence of power CEOs is not very efficient over restricting aggressive tax planning.…”

Section: Resultssupporting

confidence: 86%

“…Presence of women on board enhance economic outcomes (Reguera-Alvarado et al, 2017), higher sustainability disclosure (Ben-Amar et al, 2017), choose wellreputed external auditors (Lai et al, 2017) and pay more dividends to the shareholders (Ye et al, 2019) to restrict managers from extracting rents from free cash flows. Overall, female directors promote strong corporate governance practices in an organization (Melón-Izco et al, 2020). Accordingly, a negative link between female directorship and tax aggressiveness is evident in previous studies (Lanis et al, 2015;Richardson et al, 2016).…”

Section: Introductionmentioning

confidence: 64%

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The moderating role of board gender diversity between power-based corporate governance and tax aggressiveness

et al. 2021

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The purpose of this study is to explore the moderating effect of board gender diversity on the relationship between power-based corporate governance (CEO power and concentrated ownership) and tax aggressiveness. The sample of this study is based on 2,071 firm-year observations over the period 2010 to 2018. We employed two-step GMM estimations to account for endogeneity and other statistical biases. The results show that CEO power increases the likelihood of tax aggressiveness while the link between the large controlling shareholders and tax-avoidance activities is not statistically significant. Lastly, the findings suggest that powerful CEOs manipulate female directors to promote tax aggressiveness behavior.

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Section: Resultssupporting

confidence: 86%

Section: Introductionmentioning

confidence: 64%

The moderating role of board gender diversity between power-based corporate governance and tax aggressiveness

et al. 2021

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“…In recent years, many countries have paid special attention to diversity in the boardroom, which has been deemed as one of the indicators of good corporate governance practice (CGIO, 2012). Melón-Izco et al (2020) also found that board diversity shows the efficiency of corporate governance mechanism. Van Knippenberg et al, (2004) defined board diversity as ensuring heterogeneity among the directors.…”

Section: Introductionmentioning

confidence: 92%

The impact of gender diversity in the boardroom on banks performances

Farhana¹

2020

J. Keuang. dan Perbank.

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This research examined the impact of gender diversity in the boardroom on firm performance using banks listed on the Indonesia Stock Exchange (IDX) in the period from 2011 to 2016. Indonesia listed companies have a two-tier board structure that consist of management and supervisory board. In addition, listed companies should establish a committee board that consists of independent directors from outside the company. Thus, we investigate the gender diversity from each boardroom namely management, supervisory, and committee board. Gender diversity is measured by the Blau Index while bank's financial performances are proxied by the Return on Assets (ROA) and Capital Adequacy Ratio (CAR). These two measurements are required by Indonesian Financial Service Authority or Otoritas Jasa Keuangan (OJK). We find that the average proportion of female directors sitting on management, supervisory, and committee board in banks are 16 percent, 9.7 percent, and 14 percent, respectively. Applying panel data analysis with fixed and random effect estimator and also addressing endogeneity issue, we find that there is no significant relationship between gender diversity indexes in each boardroom and both bank's financial performance ROA and CAR. These findings may shed a light for regulator in Indonesia especially OJK whether they consider imposing gender quota in the boardroom. Abstrak Penelitian ini mengkaji dampak keberagaman gender di ruang direksi terhadap kinerja perusahaan pada bank-bank yang terdaftar di Bursa Efek Indonesia (BEI) periode 2011-2016. Perusahaan yang terdaftar di Indonesia memiliki struktur dewan dua tingkat yang terdiri dari dewan pengurus dan pengawas. Selain itu, emiten harus membentuk dewan komite yang terdiri dari direktur independen dari luar perusahaan. Karenanya, kami menyelidiki keragaman gender dari setiap ruang rapat yaitu manajemen, pengawas, dan dewan komite. Keragaman gender diukur dengan Indeks Blau, sedangkan kinerja keuangan bank diproksikan dengan Return on Assets (ROA) dan Capital Adequacy Ratio (CAR). Kedua ukuran ini diwajibkan oleh Otoritas Jasa Keuangan (OJK). Kami menemukan bahwa rata-rata proporsi direksi perempuan yang menduduki jabatan pengurus, pengawas, dan dewan komite di Bank masingmasing adalah 16 percent, 9,7 persen, dan 14 persen. Menerapkan analisis data panel dengan penaksir efek tetap dan acak serta mengatasi masalah endogenitas, kami menemukan bahwa tidak ada hubungan yang signifikan antara indeks keragaman gender di setiap ruang rapat dengan ROA dan CAR kinerja keuangan kedua bank. Temuan ini dapat menjadi titik terang bagi regulator di Indonesia khususnya OJK apakah mempertimbangkan untuk memberlakukan kuota gender di ruang rapat. How to Cite: Farhana, S. (2020). The impact of gender diversity in the boardroom on banks performances.

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“…Board size is the most significant characteristic that has been evidenced to influence the effectiveness of the boards. The vast majority of prior evidence supports the notion that large-sized boards are related to greater firm performance [49,63]. Liquidity is measured by the current ratio of firms [64].…”

Section: Research Variablesmentioning

confidence: 91%

“…Previous empirical studies on the influence of board diversity on company performance were inconsistent [49,50]. On the one hand, some studies reported the nexus of gender diversity and firm performance to be positive [9,20,21,24,25,27,40,[51][52][53].…”

Section: The Effect Of Gender Diversity On Firm Performancementioning

confidence: 99%

The Effect of the Board’s Educational and Gender Diversity on the Firms’ Performance: Evidence from Non-Financial Firms in Developing Country

et al. 2022

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Prior studies have analyzed board diversity (mostly in developed nations) using financial firms to measure demographic or cognitive characteristics in relation to firm performance. However, the current study attempted to fill the literature gap by evaluating both demographic and cognitive mechanisms in developing economies using non-financial firms in Nigeria. This study examined how board diversity in terms of the gender and educational level of directors affects the performance of Nigerian stock exchange companies. The study utilized a sample of 67 listed companies from the Nigerian stock exchange over eight years, from 2012 to 2019. A quantitative method using a deductive approach was adopted in conducting fixed effect and generalized method of moments (GMM) estimations for robust findings. The findings support the existence of a significant positive influence of both education and gender diversity on the companies’ performance. These results are consistent with agency and resource dependence theoretical expectations. The outcomes add to the current debates on those types of regulatory setters calling for corporate board diversification. The findings would greatly benefit management in the directors’ selection process as they revealed the importance of both education and gender diversity for better performance and enhancing market value. Thus, they contribute to the literature on the state of board diversity in developing countries.

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Diversity in the board of directors and good governance practices

Cited by 7 publications

References 40 publications

The moderating role of board gender diversity between power-based corporate governance and tax aggressiveness

The moderating role of board gender diversity between power-based corporate governance and tax aggressiveness

The impact of gender diversity in the boardroom on banks performances

The Effect of the Board’s Educational and Gender Diversity on the Firms’ Performance: Evidence from Non-Financial Firms in Developing Country

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