Women on boards and bank earnings management: From zero to hero

Fan, Yaoyao; Jiang, Yuxiang; Zhang, Xuezhi; Yue, Zhou

doi:10.1016/j.jbankfin.2019.105607

Cited by 153 publications

(132 citation statements)

References 118 publications

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“…Women in top management have a negative effect on earnings management, which is supported by empirical data highlighting their ability in reducing the practice of earnings management. The research findings resonate with a previous study by Fan et al (2019) who stated that the presence of three or more women in top management in a corporate business will reduce the practices of earnings management. Whereas a fewer number of women in top management will likely increase the manipulation of income.…”

Section: Women In Top Managementsupporting

confidence: 87%

“…Meanwhile, arguments about woman leaders do not positively influence firm performance especially banking are divided into two. First, women in top management and top supervisory bring a good impact on the companies (Gulamhussen & Santa, 2015;Gull et al, 2018;Fan et al, 2019). Second, women leaders do not influence firm performance (Darmadi, 2013).…”

Section: Abstrakmentioning

confidence: 99%

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Women on boards and earnings management: What really matters?

Hala

2019

Jurnal Keuangan Dan Perbankan

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The diversity of gender and income conservatism has been intriguing topics over the last decade. The effect of women who are more likely to be financially conservative than men will bring impact on the practices of conservative accounting, particularly when determining revenues for corporate governance. Therefore, we investigate the effects of women leaders in corporate business and their impacts on earnings management. The population of the study includes companies indexed in the Indonesia Stock Exchange, except for banking corporates. By using purposive sampling, 341 companies were selected for observation within six years. Total population sampling is 2046 data (firmyears). Hypothesis testing employed the multiple regression model on panel data with the Ordinary Least Square (OLS) approach. The estimation result of the Jones Model indicates women in top supervisory have no significant effect on earnings management while women in top management have a negative significant effect on earnings management. In addition, the hypothesis testing with the Kothari model demonstrates a negative significant effect of both women in top supervisory and women in top management toward earnings management. Therefore, we justify that women in top supervisory and women in top management bring prominent contributions to corporate business mainly in the financial sector, particularly in the improvement of financial reports by reducing the likelihood of earnings management practices.

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Section: Women In Top Managementsupporting

confidence: 87%

Section: Abstrakmentioning

confidence: 99%

Women on boards and earnings management: What really matters?

Hala

2019

Jurnal Keuangan Dan Perbankan

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“…This theory is typically linked to the conflict of interest result from the ownership separation (Fama & Jensen, 1983; Jensen & Meckling, 1976). The board diversity literature used it to explore topics such as board diversity influence on the agency conflict and performance of financial firms (Bektas & Kaymak, 2009; Boadi & Osarfo, 2019; Farag & Mallin, 2017; Ghosh, 2017; Kaymak & Bektas, 2008; Kusi, Gyeke‐Dako, Agbloyor, & Darku, 2018; Shettima & Dzolkarnaini, 2018; Talavera, Yin, & Zhang, 2018), CSR reporting quality of financial sector (Tapver, Laidroo, & Gurvitš‐Suits, 2020), CSR practices (Isabel María García‐Sánchez, Martínez‐Ferrero, & García‐Meca, 2018), environmental, social, and governance performance (Birindelli, Dell'Atti, Iannuzzi, & Savioli, 2018), mergers and acquisition performance (Chu, Teng, & Lee, 2016; Hagendorff et al, 2007; Hagendorff & Keasey, 2012), risk taking (Abou‐El‐Sood, 2019; De Vita & Luo, 2018; Yu et al, 2017), compensation policy (García‐Meca, 2016), audit fees (Nehme & Jizi, 2018), earnings management (Fan, Jiang, Zhang, & Zhou, 2019), determinants of banks' bailouts (Fernandes, Farinha, Martins, & Mateus, 2016), and banks' efficiency (Ramly, Chan, Mustapha, & Sapiei, 2017). It is noteworthy that the agency argument helps us to understand the supervisory role of the board members to monitor and control management activities, whereas multiple theoretical perspectives enable us to better interpret the other roles of the board of directors.…”

Section: Slr Findingsmentioning

confidence: 99%

“…In an industry as heavily regulated and opaque as banking industry (Kaymak & Bektas, 2008), knowledge is a vital form of business capital, and financial companies' improvement involves a variety of perspective, experience, and insights that can be acquired by board diversity (Khatib et al, 2020; Onuorah, Osuji, & Ozurumba, 2019). The resource dependence theory has been applied in 17 quantitative studies that discuss several topics related to board diversity such as bank performance (Boadi & Osarfo, 2019; Farag & Mallin, 2017; Ghosh, 2017; Talavera et al, 2018), compensation policy (García‐Meca, 2016), CSR (Orazalin, 2019), bank efficiency (Adeabah, Gyeke‐Dako, & Andoh, 2019) (Ramly et al, 2017), earnings management (Fan et al, 2019), and accounting quality (García‐Sánchez, Martínez‐Ferrero, & García‐Meca, 2017).…”

Section: Slr Findingsmentioning

confidence: 99%

Nudging toward diversity in the boardroom: A systematic literature review of board diversity of financial institutions

et al. 2020

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Going beyond the mere gender diversity in the boardroom, this systematic review comprehensively covers the research on board diversity of financial institutions. More specifically, we cover gender diversity, as well as other characteristics of diversity, such as nationality, age, tenure, experience, education, ethnicity, and religion. A systematic literature review was employed using Scopus and Web of Science databases, covering all publications until May 2020, which resulted in 91 studies from 66 top‐ranked journals in accounting, finance, and economic fields. We analyze them based on the journal, methodology, research construct questions, and theoretical perspectives. Our results highlight the substantial knowledge gaps and the inconsistent findings of prior studies on several aspects of the field, suggesting avenues for further studies in terms of research designs, settings, scope, and theories. We argue that there is a need to explore other board diversity attributes rather than focusing on the gender diversity of the boards of financial institutions to achieve sustainable development. Also, more work is outlined on topics related to board diversity of financial firms that receive limited attention from scholars, such as (but not limited to) environmental performance, capital structure, intellectual capital, innovation and earnings quality of financial institutions, as well as the indirect effect of policy settings.

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“…Fourth, there is a negative relationship between women on boards and earnings management in most of the related literature on the forming mechanism of earnings management from the perspective of gender diversity (Fan et al, 2019) especially those female directors in supervisory positions (Koo and Kim, 2019). Moreover, when the number of women directors reaches three or more, earnings management declines greatly, and when women directors have higher education levels and more board experience, they can reduce earnings management to a great degree.…”

Section: Impact Mechanisms Of Female Executives On Pay Componentmentioning

confidence: 99%

How can Female Executives Shape the Effectiveness of Executive Compensation?- A Multi-Dimensional Approach

Zhang

Yang

2019

Journal of Social Economics Research

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This paper attempts to build and analyze a conceptual model to systematically study the impact mechanism of female executives on the following dimensions of executive compensation including pay-performance sensitivity, executive pay level, executive pay component and pay gap from multiple theoretical perspectives of managerial power, principal-agent and employee discrimination theory, etc. The paper concludes as follows: (1) seven specific impact mechanisms of female executives on executive payperformance sensitivity have been identified including enhancing monitoring role, lowering insider trading, increasing remuneration disclosure and adopting more balanced setting rules; (2) six specific impact mechanisms of female executives on executive pay level have been clarified such as reducing corporate tax avoidance, mitigating unethical earnings manipulation behavior or accounting fraud behavior and choosing lower level of leverage ratio；(3) it is found that female executives would enhance executive pay components diversity by adding additional pay components to compensation package, mainly including social responsibility-based pay, environmental performance-based pay, innovation performance-based pay and reducing extra unethical pay due to financial statement fraud or earnings manipulation and (4) female executives would enlarge executive-employee compensation pay gap, moderate the gender compensation gap among employees and narrow executive compensation gap due to the female executives' need for affiliation, etc. Taking 499 Chinese A-share listed companies selected in the corporate social responsibility rating report issued by Rankings CSR Ratings from 2012-2016 as the research sample, we examine the above theoretical propositions by adopting the multiple regression method based on OLS. Contribution/Originality: This paper's primary contribution is finding seven specific impact mechanisms of female executives on executive pay-performance sensitivity, six specific impact mechanisms of female executives on executive pay level and female executives would enhance executive pay components diversity.

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Women on boards and bank earnings management: From zero to hero

Cited by 153 publications

References 118 publications

Women on boards and earnings management: What really matters?

Women on boards and earnings management: What really matters?

Nudging toward diversity in the boardroom: A systematic literature review of board diversity of financial institutions

How can Female Executives Shape the Effectiveness of Executive Compensation?- A Multi-Dimensional Approach

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