Female directors and managerial opportunism: Monitoring versus advisory female directors

Abstract

Going beyond the mere participation of female directors within boardrooms, we investigate which of the two major boards of directors' roles (advisory versus monitoring) is best played by female directors in order to make a difference to shareholders. More specifically, we investigate the impact that advisory and monitoring female directors have on managerial opportunism with a specific focus on earnings management. Using sample of US firms, we find evidence suggesting that female directors holding monitoring roles mitigate managerial opportunism, as measured by discretionary accruals. In contrast to the current argument that advisory directors in general are better able to sustain and improve earnings quality, we find no evidence that suggests that advisory female directors are significantly associated with lower managerial opportunism. Overall, the results remain robust after controlling for potential endogeneity problems, corporate governance, and external auditor quality.

Gender-diverse boards get better performance on mergers and acquisitions

“…We do not find support for a substitutive effect between gender diversity on the board and the gender diversity on the executive team. Nevertheless, results in Table 6 support our earlier findings under Tables 4 and 5, and are in line with previous findings that show that gender diversity promotes some prudent attitude within board member and enhances its effectiveness (Arun, Almahrog, & Ali Aribi, 2015; Zalata et al, 2019). Taken together, our results suggest that gender diversity can arguably result in better M&A decisions, and therefore in better M&A performance.…”

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

“…Many countries have employed a quota for women on all listed companies boards. For example, the Norwegian government led this initiative by mandating to have women make up 40% for boardroom (Zalata, Ntim, Aboud, & Gyapong, 2019; Zalata, Ntim, Choudhry, Hassanein, & Elzahar, 2020). The EU approved similar legislation with a 40% goal by 2020.…”

Corporate social responsibility, board gender diversity and real earnings management: The case of Jordan

“…In this context, board gender diversity (BGEND) is one of corporate governance mechanisms that is widely discussed in the accounting literature, especially in connection with firms' social and environmental issues (Haque, 2017;Nguyen et al, 2020). BGEND serves as an effective governance monitoring tool and is considered as one of the main drivers of sustainable growth (Orazalin & Baydauletov, 2020;Zalata et al, 2019). According to agency theory, monitoring is one of the main functions performed by corporate boards (Jensen & Meckling, 1976).…”