Board generational cohorts,gender diversity and corporate environmental and social disclosures: Evidence from China

We examine the association between board generational cohorts and corporate environmental and social disclosure. We find that older board members have a positive association with corporate environmental and social disclosures. In contrast, the moderately younger and youngest board members limit corporate environmental and social disclosures. Our results are robust to potential endogeneity with the use of alternative model specifications, with the youngest board members accounting for a lower level of corporate environmental and social disclosures. Furthermore, we find that the presence of gender diversity on the board moderates the relationship between board generational cohorts and corporate environmental and social disclosures and reporting incentives are important to oldest and youngest board members in their push for environmental and social disclosures. Finally, additional analysis indicates that firms with governmental shareholding are associated with a higher level of corporate environmental and social disclosures as compared to firms without governmental shareholding when board members are moderately young.     

Is social capital a determinant of board gender diversity?

We examine the impact of social capital on board gender diversity among U.S. firms. We test whether trust and social networks in a county lead to an increase in female board representation. We find that firms headquartered in high‐social‐capital counties have higher diversity in their corporate board. Economically, we estimate that a 1 standard deviation (SD) increase in social capital leads to a 0.042 SD increase in board gender diversity. We contribute to the literature by extending the evidence on board gender diversity determinants to informal institutions.     

Social Concentration on Boards,Corporate Information Environment and Cost of Capital

Prior evidence on the relationship between demographic diversity in corporate boards and firm performance is mixed. Some studies have found that the relationship between board attributes and firm performance is driven by a firm's information environment. This study examines whether corporate transparency also impacts the relationship between gender and ethnic diversity of directors and firm performance. To test this hypothesis, I use a Herfindahl Index based on directors’ gender and ethnicity to measure board diversity, and an opacity index based on analyst following, analyst forecast error, bid‐ask spread, and share turnover to measure corporate transparency. I find that the cost of capital is positively associated with social concentration on corporate boards and that this premium is larger for highly opaque firms. In further analysis, I find that the interaction of corporate information environment and social concentration on boards is more important for operationally complex firms. Compared with simple firms, operationally complex firms pay a greater premium on their capital if they have a socially concentrated board and an opaque information environment.     

Board of Directors and CSR in Banking: The Moderating Role of Bank Regulation and Investor Protection Strength

This paper brings together research on boards of directors as the backbone of corporate governance and corporate social responsibility (CSR) practices in the banking industry. The underlying idea is that some characteristics of bank boards, in particular independence and gender diversity, may impact the CSR commitments of banks. By making use of a sample of 159 banks in nine countries during the period 2004–2010, our empirical evidence suggests that banks with more independent directors and more female members on their boards incline toward socially responsible behaviour. Our results also suggest that institutional factors play a significant role in these effects. They show that in greater regulatory and stronger investor protection environments, board independence and gender diversity have more influence on the social behaviour of banks.     

Cultural diversity among directors and corporate social responsibility

We examine the relationship between board diversity and a firm's corporate social responsibility (CSR) performance in a novel way. The relation between visible forms of board diversity (gender, ethnic, age diversity) and CSR may arise endogenously due to visible diversity management. In contrast, we focus on cultural diversity (based on directors' ancestry), which is less visible. We demonstrate that cultural diversity, unlike visible diversity, is not considered in director replacements, consistent with cultural diversity not being affected by firms signaling their CSR commitment by ‘looking’ diverse. We show that board cultural diversity is positively related to CSR performance. This result holds when we control for visible board diversity, directors' foreignness and diversity in nationalities, and endogeneity. We also show that CSR performance decreases when a firm increases its visible board diversity at the cost of cultural diversity.     

Tradeoff between corporate investment and CSR: The moderating effect of financial slack,workforce slack,and board gender diversity

This paper investigates the existence of a tradeoff between corporate investment (i.e., tangible and intangible) and corporate social responsibility (CSR) in the presence of the moderating effects of financial slack, human resources slack, and board gender diversity. Based on an international sample of 44,129 firm-year observations between 2005 and 2019, we find that corporate investment leads to significantly lower CSR engagement in all three pillars (i.e., environmental, social, and governance). Furthermore, while financial slack positively moderates between corporate investment and CSR, human resources slack and board gender diversity negatively moderate between corporate investment and CSR. This outcome is robust in terms of endogeneity concerns, alternative sampling, alternative investment proxies, CSR regulations, and timing impacts. Hence, we find the dominance of the shareholders' perspective rather than the stakeholders' perspective. The results outline the tradeoff between corporate investment and CSR and the role of contingencies in this tradeoff relationship.     

Corporate culture and board gender diversity: Evidence from textual analysis

Exploiting a distinctive measure of corporate culture based on advanced machine learning, we investigate the effect of board gender diversity on corporate culture. Our results demonstrate that greater board gender diversity considerably strengthens positive corporate culture. The findings support the notion that board gender diversity enhances board oversight and helps solve agency problems, resulting in managers being compelled to take measures that benefit shareholders and consequently, building a strong company culture. Further analysis validates the results, including propensity score matching (PSM), entropy balancing, an instrumental-variable analysis, Lewbel's (2012) heteroscedastic identification, and Oster's (2019) testing for coefficient stability. Our study is the first to link board gender diversity to corporate culture, using cutting-edge information obtained from sophisticated machine learning.     

Board diversity,firm risk,and corporate policies

We examine the effects of diversity in the board of directors on corporate policies and risk. Using a multidimensional measure, we find that greater board diversity leads to lower volatility and better performance. The lower risk levels are largely due to diverse boards adopting more persistent and less risky financial policies. However, consistent with diversity fostering more efficient (real) risk-taking, firms with greater board diversity also invest persistently more in research and development (R&D) and have more efficient innovation processes. Instrumental variable tests that exploit exogenous variation in firm access to the supply of diverse nonlocal directors indicate that these relations are causal.     

Corporate Governance, Board Diversity, and Firm Value

This study examines the relationship between board diversity and firm value for Fortune 1000 firms. Board diversity is defined as the percentage of women, African Americans, Asians, and Hispanics on the board of directors. This research is important because it presents the first empirical evidence examining whether board diversity is associated with improved financial value. After controlling for size, industry, and other corporate governance measures, we find significant positive relationships between the fraction of women or minorities on the board and firm value. We also find that the proportion of women and minorities on boards increases with firm size and board size, but decreases as the number of insiders increases.     

Effects of female directors on gender diversity at lower organization levels and CSR performance: Evidence in Japan

This paper examines the effects of board gender diversity on female representation at lower organization levels and corporate social responsibility (CSR) performance. Using a panel data set of more than 1000 Japanese listed firms from 2005 to 2014, we focus on firms that introduced female directors to their male-dominant boards for the first time and find that the first-introduced female directors are positively associated with a greater number of female officers and managers. The introduction of the first female director is also associated with better CSR performance. Our results are statistically significant and suggest that board gender diversity has an effect on promoting gender diversity at lower levels and CSR performance in listed firms.     

公司治理与可持续性绩效关系研究

随着可持续发展理念在全球的广泛应用,越来越多的企业开始重视可持续发展战略。本文选取2016年73家以可持续发展报告指南第四版编写社会责任报告的上市公司相关数据,从公司治理的董事会特言征、股权结构和高管激励三方面入手,研究公司治理与可持续性绩效的关系。经分析得出以下结论:董事会规模和董事会会议次数与可持续性绩效呈正相关关系,股权集中度与股权制衡度与可持续性绩效呈正相关关系,高管薪酬与可持续性绩效呈负相关关系。     

Board diversity and stock price crash risk

We show how board diversity influences stock price crash risk. By classifying board diversity into relation-oriented diversity (gender and age) and task-oriented diversity (tenure and education), we find that greater diversity on board can lower the risk of future stock crash. Additional analyses show that the effect of board diversity on future crash risk is stronger for firms with high information opacity and low institutional ownership. Overall, our findings provide new insights and suggest for more diverse boards to improve corporate governance practices.     

The connection between gender diversity and firm performance: Evidence from Taiwan

This paper examines the factors influencing female board membership in Taiwan over the period from 1996 through 2017 and the potential impact of female board representation on firm performance. With 16,477 firm-year observations, our findings show that Taiwanese firms with higher board independence and institutional ownership tend to have lower female board representation. In examining performance implications, the results suggest that board gender diversity is positively associated with firm performance overall. This positive relationship is even stronger in small firms, where female directors may have more influence. In subsample analysis based on lowest and highest ultimate control ownership, we document that the positive impact of board gender diversity is mainly driven by firms that have high ultimate control ownership. Our findings suggest that, in environments with weak corporate governance, female board members may act as effective monitors, especially in smaller firms. Regulators and firms in developing economies with weak corporate governance environment should encourage gender diversity on boards.     

Securities litigation risk and board gender diversity

We investigate the effect of board gender diversity on the risk of securities litigation. We find that this risk is inversely related to the fraction of female independent directors on a firm's board. Additionally, the effectiveness of these directors in reducing securities litigation risk is negatively related to the firm's monitoring costs and positively related to its complexity. We further investigate the channels through which female independent directors may reduce the risk of securities litigation and attribute the reduction to improvements in conditional accounting conservatism and corporate social responsibility policy.     

企业社会责任报告鉴证意见是否具有信息含量——来自我国上市公司的经验证据

近年来,我国上市公司披露企业社会责任报告的现象越来越多,企业保证社会责任报告质量的方式有两种:一是独立第三方出具的企业社会责任报告鉴证意见;二是企业董事会对企业社会责任报告质量出具的自我承诺。这两种保证形式是否具有信息含量是大家所关心的问题。本文以沪深两市2009—2010年披露企业社会责任报告的940家上市公司为研究对象,依据信号传递理论,运用事件研究法研究发现:企业社会责任报告鉴证意见具有正向的市场反应,而董事会承诺不具有市场反应。根据我国的制度背景、理论分析和实证结果,从如何完善我国的企业社会责任报告鉴证标准、鉴证主体、鉴证客体、政府部门对董事会承诺的监管重点等方面提出了政策建议。     

Board diversity and corporate propensity to R&D spending

Drawing on collective contributions and group performance perspectives, this paper examines the role of board diversity in firms' R&D investment decisions. Building on a fault-line argument about a team's demographic attributes, this study also decomposes the impact of demographic and cognitive diversity on R&D spending. The study sample contains UK data of non-financial companies covering the period between 2005 and 2018. We employ panel data analysis techniques and control for potential endogeneity issues through the application of the two-step system Generalised Method of Moments (GMM) estimations. The findings demonstrate a positive and significant relationship between board diversity and level of corporate R&D spending. The findings also show cognitive diversity as significantly positively associated with corporate R&D investments. Demographic diversity, however, has an insignificant relationship with corporate spending on R&D. The results further show that demographic diversity negatively moderates the relationship between cognitive diversity and spending on R&D. Our main findings document that the board's attributes as a group significantly influence decisions of strategic importance such as, investment in R&D projects. The findings on sub-dimensions of board diversity imply that as compared to demographic diversity, functional/cognitive diversity is more relevant to strategic decisions and related outcomes. The study has practical implications for shareholders in documenting the importance of board diversity, and policy implications for regulators in highlighting the separate roles of behavioural and cognitive diversity in shaping firms' strategic investment decisions.     

Corporate governance and dynamics capital structure: evidence from Vietnam

This paper examines the relationship between corporate governance and speed of adjustment (SOA) of capital structure for listed firms in Vietnam from 2000 to 2016. We first examine the literature on the influence of crucial corporate governance mechanisms, including gender diversity and managerial ownership, on SOA. Empirically, we then find that board size, board independence, gender diversity, and managerial ownership significantly increase SOA, but CEO duality significantly decreases it. We discuss some policy implications for firms and Vietnamese authorities.     

Social networks and managerial rent-seeking: Evidence from executive trading profitability

This study examines whether board social networks are associated with executive trading profitability. Using a sample of US public firms with a history of executive trading from years 2000 to 2015, we find robust evidence that the profitability of executive trading is significantly lower in firms with higher levels of board social networks. The evidence is consistent with our view that board social networks effectively curb executives' private information advantage over outsiders, thus leading to a lower level of managerial rent-seeking. Our research has policy implications for regulators concerned about the role of corporate board in capital markets.     

Exploring the Board Structures and Member Profiles of Top ASX Companies in Australia: An Industry‐level Analysis

Using published data from the top 166 ASX companies and 1244 corporate board members, this paper presents an industry‐level analysis of board structures and member profiles, and assesses them in terms of the ASX (2014, 2003) principles and recommendations. The analysis reveals that the average board size was seven, non‐executive director (NED) representation on boards was 70%, women held 14% of seats on corporate boards, 17% of NEDs were women and 2% of firms had chairperson/CEO duality positions. The Financial, Industrial and Energy sectors consisted of a majority of executive directors from business and the accounting field and NEDs from the engineering field with work experience of 20 to 30 years. A greater degree of diversity in the field of study and previous experience in the same and different sectors was found in relation to board members in the majority of industrial sectors. The analysis reveals that board characteristics such as board size, having a clear majority of NEDs on boards, decreasing trends in chairperson/CEO duality position, board member diversity in terms of qualifications and previous experience in the same and different sectors were largely consistent with the ASX principles and corporate governance practices.     

The Emergence of Corporate Governance from Wall St. to Main St.: Outside Directors, Board Diversity, Earnings Management, and Managerial Incentives to Bear Risk

Recent corporate events have brought a heightened public awareness to corporate governance issues. Much work has been accomplished to date, but it is clear that much more remains to be done. This paper provides a review of empirical research in four relevant areas of corporate governance. Specifically, the paper provides an overview of (a) the role that outside directors play in monitoring managers, (b) the emerging literature on the impact of board diversity, (c) the existence of and incentives for corporate executives to manage firm earnings, and (d) managerial incentives to bear risk.