Gender diversity and earnings management: the case of female directors with financial background

Zalata, A., Ntim, C.G., Hussien, M. and Malagila, J. 2022. Gender diversity and earnings management: the case of female directors with financial background. Review of Quantitative Finance and Accounting. 58, pp. 101-136. https://doi.org/10.1007/s11156-021-00991-4

TitleGender diversity and earnings management: the case of female directors with financial background
TypeJournal article
AuthorsZalata, A., Ntim, C.G., Hussien, M. and Malagila, J.
Abstract

Past evidence generally suggests that the presence of female directors on corporate boards tends to improve earnings quality due to these directors’ superior monitoring abilities. However, it is not clear which characteristics and skills of female directors drive such abilities. In this paper, we focus on the financial background of female directors, an area which remains largely unexplored in existing literature. The results show that the participation of female directors with relevant financial background improves earnings quality more than the participation of female directors without such background. In addition, our findings suggest that only female directors possessing relevant financial background and having fewer outside directorships are able to mitigate earnings management and therefore overcommitting expert female directors with more outside directorships would diminish their monitoring ability. We did not find any evidence suggesting that female directors without relevant financial background are able to mitigate earnings management, irrespective of their outside directorships or tenure. We interpret our findings within a theoretical framework that draws on a number of economic and social theories. The results are generally robust after controlling for potential endogeneity problems.

KeywordsEarnings management
Female directors
Financial expertise
Economic versus social theories
JournalReview of Quantitative Finance and Accounting
Journal citation58, pp. 101-136
ISSN1573-7179
0924-865X
Year2022
PublisherSpringer
Publisher's version
License
CC BY 4.0
File Access Level
Open (open metadata and files)
Digital Object Identifier (DOI)https://doi.org/10.1007/s11156-021-00991-4
Web address (URL)https://link.springer.com/article/10.1007%2Fs11156-021-00991-4
Publication dates
Published online24 Jun 2021
Published onlineJan 2022
Supplemental file
File Access Level
Open (open metadata and files)

Permalink - https://westminsterresearch.westminster.ac.uk/item/v57x8/gender-diversity-and-earnings-management-the-case-of-female-directors-with-financial-background


Share this

Usage statistics

76 total views
39 total downloads
These values cover views and downloads from WestminsterResearch and are for the period from September 2nd 2018, when this repository was created.