Publication: The monitoring role of female directors over accounting quality
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2017-08-01
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Elsevier
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Abstract
Recent research in accounting suggests female directors exert more stringent monitoring over
the financial reporting process than their male counterparts. However, an emerging literature
in finance and economics provides mixed findings and questions whether females in leadership
roles significantly differ from their male counterparts. Building on this literature, we re-examine
the link between the presence of female directors, gender biases, and financial statements
quality. Using a large sample of UK firms we find that a larger percentage of women among
independent directors is significantly associated with lower earnings management practices.
However, we show that this relation disappears if we focus on firms that do not discriminate
against women in the access to directorships. Finally, we provide evidence that gender biases
are associated with lower earnings quality. We interpret our results as consistent with (1)
prior evidence that males and females do not differ substantially when performing the same
role in highly specialized positions, and with (2) discrimination being an important factor
explaining the association between female directors and accounting quality.
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Keywords
Gender diversity, Board of directors, Accounting quality, Earnings management, Corporate governance
Bibliographic citation
García Lara, J. M., García Osma, B., Mora, A., & Scapin, M. (2017). The monitoring role of female directors over accounting quality. Journal of Corporate Finance, 45, pp. 651-668.