Gender diversity, governance and dividend policy in Brazil

Abstract

PurposeConsidering that the heterogeneity in the composition of deliberation and management bodies can promote a differentiated impact on earnings distribution policies of companies, the purpose of this paper is to examine the marginal influence of female participation on the board of directors and executive board regarding decisions associated with dividend policy in companies operating in Brazil.Design/methodology/approachThe sample is composed of non-financial companies listed on the B3 Stock Exchange between 2010 and 2015, which encompasses 261 companies (1,084 observations per year). The tests aim at explaining the probability of earnings distribution and the payout level of companies through variables that measure the female presence – considering that the explanatory economic attributes of decisions over dividends are kept under control. The econometric analysis was carried out through the descriptive analysis of the variables and LOGIT and TOBIT tests of inference estimated with fixed effects and meeting all econometric requirements.FindingsThe proportion of women in both deliberative and executive bodies affects marginally the dividend policy of Brazilian companies. The female presence in management bodies contributes to a higher probability of earnings distribution and increase in the payout level; such tendency is moderated when women are in the board of directors; so, we do not reject the hypothesis of female influence on dividend policy decisions in Brazil.Originality/valueOne can find such investigations in foreign environments, but such tests had not been accomplished in Brazil so far. We discuss, therefore, in an unprecedented way, the heterogeneity in deliberative (governance) and executive (management) bodies and its outcomes in strategic decisions made in Brazilian companies, focusing on the female insertion and on fundamental decisions that are related to the relationship among stakeholders, which is the dividend policy per se.

Board gender diversity, financial decisions and free cash flow: empirical evidence from Malaysia

“…Consequently, women directors are more inclined to set higher dividend payout ratios. Our finding is consistent with Ye et al (2019), Sanan (2019) and Almeida et al (2020) whose studies indicated that the presence of women on the board improves corporate governance practices and contributes to higher dividend payout.…”

“…Therefore, firms with more female directors on the boards appear to face lower litigation risk, which, perhaps, in part explains higher payouts. By improving corporate governance and the protection of shareholder interests, board gender diversity can encourage the payment of corporate dividends (Benjamin and Biswas, 2019;Almeida et al, 2020). The results are also consistent with the predictions of resource dependence theory according to which female directors bring their better experiences, skills and abilities to the board, which increases board efficiency (Hillman and Dalziel, 2003).…”

“…As argued by Carter et al (2003), board diversity increases board independence, which helps make more effective decisions, including decisions regarding the allocation of FCF. In a similar vein, Almeida et al (2020) argue that board gender diversity allows for greater monitoring actions that align managers' interests with those of the shareholders, which reduces the agency costs of FCF.…”

“…Female board representation is one of the most important governance issues facing managers, directors and stockholders and it is considered part of good corporate governance (Adams and Ferreira, 2009;Buallay et al, 2020;Cambrea et al, 2020). The presence of female directors on boards is likely to increase board independence (Carter et al, 2003) and strengthen monitoring mechanisms on executives (Almeida et al, 2020;UlAin et al, 2020).…”

Pengaruh atribut tata kelola dan karakteristik perusahaan terhadap kebijakan dividen pada perusahaan di BEI

“…Komposisi direksi wanita pada perusahaan Indonesia cenderung rendah, sehingga menyebabkan pengaruh direksi wanita menjadi insignifikan. Kondisi demikian juga dihasilkan pada penelitian (Almeida et al, 2020). Namun hasil pada model kedua menunjukkan bahwa direksi wanita memberikan pengaruh signifikan negatif terhadap DP2.…”