Does board gender diversity influence voluntary disclosure of intellectual capital in initial public offering prospectuses? Evidence from China

Abstract

Research question/issue Using a multitheoretic view of boards, this study examines the impact of boardroom gender diversity (BGD) on voluntary intellectual capital (IC) disclosure in initial public offering (IPO) prospectuses in China—the world's second‐biggest economy, which is moving from a planned economy to a market‐oriented one. Furthermore, this study also investigates the impact of family ownership on the relationship between BGD and IC disclosure in the Chinese environment, which is characterized by less‐developed corporate governance mechanisms. Research findings/insights Based on a comprehensive content analysis of Chinese IPO prospectuses between 2009 and 2017 and measuring disclosure index at 78 dimensions under six broad categories of IC, the empirical results document (a) a significant positive relation between BGD and IC disclosure—in line with resource dependence theory, (b) a significant negative impact of female independent directors on IC disclosure—opposite to agency theory predictions, and that (c) the BGD–IC disclosure relationship is generally stronger for firms with two or more women on boards—in line with critical mass theory in China. Finally, this study also reveals that family ownership has adverse impacts on the BGD–IC disclosure relationship. These results are robust to a battery of sensitivity analyses. Practitioner/policy implications This study provides positive capital market implications of BGD through enhanced IC disclosure in IPO prospectuses. In doing so, the study has important implications for regulators and top management teams in devising policies concerning female representation on boards and voluntary disclosure of IC to inform the market participants of the true value of the company.

Are women eco‐friendly? Board gender diversity and environmental innovation

“…We follow prior studies (Liu, 2018; Nadeem, 2020; Nadeem et al, 2020) and measure our main independent variable, that is, BGD , as the proportion of female directors to total directors on boards. We also apply an alternative proxy measure as a robustness check: the Blau index ( BLAU ) of gender diversity.…”

“…We follow prior studies (Liu, 2018;Nadeem, 2020;Nadeem et al, 2020) and measure our main independent variable, that is, BGD,…”

“…Traditionally, the fiduciary duties of corporate directors have been to protect shareholder interests (Nadeem, 2020). The main tasks of boards of directors encompasses monitoring of internal management, acquiring necessary resources, and strategic policy‐making, with a view to maximizing shareholder wealth (Goh, Lee, Ng, & Ow Yong, 2016; Shahab et al, 2019).…”

“…Due to the dynamic nature of a board's duties and a director's responsibilities towards multiple stakeholders, recent studies (e.g., Hussain, Rigoni, & Orij, 2018; Nadeem, 2020) employ a multitheoretic view of boards to explain the relationship between board characteristics and corporate outcomes. Therefore, the theoretical support for the possible link between BGD and environmental innovation comes from the two most prominent theories: upper echelon theory and gender socialization theory.…”

Board gender diversity and environmental, social, and economic value creation: Does family ownership matter?

“…Phillips () defines legitimate stakeholders as those groups or individuals who are integral to the survival and “going concern” of the firm. Within this definition, shareholders may clearly be classified as legitimate stakeholders because, as providers of capital, their legitimacy and impact on a firm's going concern remain unquestionable (Nadeem, ). As a result, most firms focus on economic value creation (economic returns) because of the view that shareholders who are important legitimate stakeholders expect economic returns on their investment.…”