Does Board Gender Diversity Really Improve Firm Performance? Evidence from Greek Listed Firms

Arvanitis, Stavros; Varouchas, Evangelos G.; Agiomirgianakis, George

doi:10.3390/jrfm15070306

Cited by 39 publications

(31 citation statements)

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“…By investigating this underexplored research question, we contribute to a more comprehensive and nuanced understanding of the complexities at play. Our results challenge the notion that the relationship between gender diversity and firm performance can be universally generalized across all institutional settings (Brahma et al, 2021;Arvanitis et al, 2022;Gharbi and Othmani, 2022). Instead, we emphasize the critical importance of considering the variations in cultural norms, legal frameworks and social contexts that shape the dynamics within each context (Jayachandran, 2021;Koburtay et al, 2023).…”

Section: Theoretical Implicationscontrasting

confidence: 74%

Is a critical mass of women always enough to improve firm performance? The importance of the institutional context

Zaccone,

Argiolas

2023

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Purpose This paper aims to present a comprehensive theoretical framework that seeks to explore the impact of cultural, legal and social factors within the external environment on the relationship between women on corporate boards and firm performance. By investigating these boundary conditions, the paper aims to shed light on how these pressures influence the aforementioned relationship. Design/methodology/approach To build the sample of companies, the authors selected companies listed on the stock exchanges of countries that represent a diverse range of institutional contexts. These contexts encompass countries with individualistic cultures, collectivist cultures, environments with mandatory gender quotas, environments without gender quotas, contexts with substantial progress toward gender equality and contexts with limited progress in achieving gender equality. To test the hypotheses, the authors used linear regression analysis as a primary analytical approach. Furthermore, they used the propensity score matching technique to address potential issues of reverse causality and unobserved heterogeneity. Findings The findings indicate that the positive influence of a critical mass of women on corporate boards on firm performance is contingent upon the institutional context. Specifically, the authors observed that this relationship is strengthened in institutional contexts characterized by an individualistic culture, whereas it is not as pronounced in collectivist cultural contexts. Furthermore, this research provides compelling evidence that the presence of a critical mass of women on boards leads to enhanced firm performance in institutional settings where gender quotas are not binding, as opposed to settings where such quotas are enforced. Lastly, the results demonstrate that the presence of a critical mass of women on boards is associated with improved firm performance in institutional settings characterized by low progress in achieving gender equality. However, the authors did not observe the same effect in institutional contexts that have made significant strides toward gender equality. Originality/value This research offers a unique perspective by investigating the relationship between women’s presence on corporate boards and firm performance across different institutional contexts. In this investigation, the authors recognize that gender diversity on corporate boards is not a one-size-fits-all solution and that its effects can be shaped by the unique institutional contexts in which companies operate.

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Section: Theoretical Implicationscontrasting

confidence: 74%

Is a critical mass of women always enough to improve firm performance? The importance of the institutional context

Zaccone,

Argiolas

2023

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“…The association between BGD and firm performance has been excessively studied in previous literature, but the reached results were mixed. Several previous works, namely, Jiang et al (2020), EmadEldeen et al (2021, Arvanitis et al (2022), Brahma et al (2022), Fahad et al (2022) and Fayyaz et al (2022), showed that gender diversity is positively related to firm performance. This positive association confirms that women directors improve the effectiveness of boards based on their innovation and creativity regarding problem-solving, thus enhancing corporate performance.…”

Section: Bgd and Financial Performancementioning

confidence: 91%

“…To increase women's representation in boardrooms, countries such as Germany, Norway, Spain, France, Iceland, Italy, Belgium, Finland and Kenya have passed a legislative quota requiring firms to appoint between 30% and 40% of women to corporate boards (Brahma et al , 2022; Arvanitis et al , 2022). In contrast, the UK has adopted a voluntary approach against the quota-based approach.…”

Section: Introductionmentioning

confidence: 99%

Gender diversity, financial performance, and the moderating effect of CSR: empirical evidence from UK financial institutions

Fatma

Chouaibi

2023

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Purpose This study aims to examine the direct relationship between board gender diversity (BGD) and financial performance and the moderating role of corporate social responsibility (CSR) in the said relationship. Design/methodology/approach Using data collected from the Thomson Reuters Eikon ASSET4 database from 42 UK financial institutions listed in the ESG index for the period 2005–2019, this study used multivariate regression analysis on panel data to test the effect of BGD on financial performance and estimate the moderating effect of CSR between them. Moreover, to control the endogeneity problem, the authors conducted an additional analysis by testing the dynamic dimension of the data set through the generalized moment method. Findings The empirical results show that BGD is positively related to financial performance and that BGD increases firm performance with the moderating effect of CSR. Regarding the endogeneity problem, the existence of continuity between financial institution performances over time is demonstrated. Research limitations/implications The current paper sheds light on the importance of BGD in improving firm performance and the moderating role of CSR in strengthening the relationship between BGD and firm performance, thereby contributing to the agency theory, the resource dependency theory and the stakeholder theory. Therefore, regulators and policymakers in the UK can use the outcomes of this study to enforce the representation of female directors on boards to enhance the financial performance of financial institutions. Moreover, the findings could be useful for regulatory bodies to encourage financial institutions to practice CSR activities and disclose them in their annual reports. Originality/value To the best of the authors’ knowledge, this is the first study investigating the moderating role of CSR on the relationship between BGD and financial performance in the context of the financial sector. It is also the first study documenting that CSR reinforces the relationship between gender-diverse boards and financial institutions' performance. This study fills a research gap as it expands the existing literature that has generally focused on the impact of BGD on financial performance and has not reached similar results.

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“…Using Chinese-listed companies from 2010 to 2016, the results show that companies with a critical mass of at least three female board members have both high quality and faster implementation of environmental measures. Some of the studies show that the positive effect of women executives on performance turns into a negative effect after a certain critical point; almost 20% women board members (Nguyen et al, 2020) and a critical point of 33% women board members (Arvanitis et al, 2022). Fern andez-Temprano and Tejerina-Gaite (2020) look at Spanish nonfinancial companies and find no evidence of a possible impact of gender diversity on performance.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Critical masses and voluntary climate change disclosures: evidence from Türkiye

Kutlu Furtuna,

Sönmez

2023

SRJ

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Purpose This paper aims to examine the effect of critical mass of women managers on corporate boards on the voluntary disclosure of climate change in a developing country in which the regulations on climate change disclosure is an area of growing research interest. Design/methodology/approach This study uses logistic panel regression models with a sample of 1,001 firm-years for companies in the Borsa Istanbul 100 Index that were asked to disclose voluntary climate change indicators over the seven-year period from 2014 to 2020 through the Carbon Disclosure Project. Findings This paper provides evidence from an emerging country that the critical mass of women on the board has no impact on voluntary climate change disclosure. In addition, the presence of independent managers on the board was found to have a significant impact on climate change disclosure. In addition, the results show that larger companies are more likely to report their climate change activities. Large companies are more visible due to their size, are perceived by stakeholders as more polluting and are, therefore, more likely to report on the environment. Social implications The results show that the critical mass of women on the board has no effect on voluntary disclosure of climate change. Empirical tests are still needed to strengthen the overall validity of the critical mass of at least three women on boards in Türkiye. Originality/value Despite many valuable insights provided by critical mass theory, very few studies directly address critical mass and voluntary disclosure of climate change. To the best of the authors’ knowledge, this study is the first empirical and comprehensive paper in the Turkish context evaluating critical masses and voluntary corporate climate change giving a comparison between firms listed on financial industry and nonfinancial industry.

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Does Board Gender Diversity Really Improve Firm Performance? Evidence from Greek Listed Firms

Cited by 39 publications

References 50 publications

Is a critical mass of women always enough to improve firm performance? The importance of the institutional context

Is a critical mass of women always enough to improve firm performance? The importance of the institutional context

Gender diversity, financial performance, and the moderating effect of CSR: empirical evidence from UK financial institutions

Critical masses and voluntary climate change disclosures: evidence from Türkiye

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