Journal article
Female Directors and Earnings Quality
Contemporary Accounting Research, Vol.28(5), pp.1610-1644
2011
Abstract
A spate of legislated quotas for female representation on corporate boards in European firms and significant voluntary increases in the number and proportion of female directors in U. S. firms indicate that board gender diversity has increasingly been recognized as a matter of importance worldwide. Although the proponents of gender diversity have argued that it results in greater transparency and makes corporate earnings more credible, there is little supporting empirical evidence. We fill this void by examining the relation between female board participation and the quality of reported earnings. Using a sample of U.S. listed firms from 2001 to 2007, we show a positive relation between the presence of female directors (female nonexecutive directors, female audit committee members) and earnings quality, measured by accruals quality and earnings benchmark measures (the frequency of earnings increases and the frequency of meeting or beating consensus analyst earnings estimates). The results continue to be significant after controlling for endogeneity, firm-level board governance, and other known firm and industry characteristics. Our findings are not driven by tokenism (having one female director to create a perception of inclusion) and are robust to alternative variable definitions. These findings provide much needed support for the increased attention paid to gender diversity on corporate boards.
Details
- Title
- Female Directors and Earnings Quality
- Authors
- Bin Srinidhi (Author) - City University of Hong KongFerdinand A. Gul (Author) - Monash University MalaysiaJudy Tsui (Author) - Hong Kong Polytechnic University
- Publication details
- Contemporary Accounting Research, Vol.28(5), pp.1610-1644
- Publisher
- Canadian Academic Accounting Association, Association Canadienne des Professeurs de Comptabilite
- DOI
- 10.1111/j.1911-3846.2011.01071.x
- ISSN
- 1911-3846
- Organisation Unit
- University of the Sunshine Coast, Queensland; School of Business and Creative Industries
- Language
- English
- Record Identifier
- 99678895302621
- Output Type
- Journal article
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