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Women on boards, sustainability reporting and firm performance

Author

Listed:
  • Mahmoud Arayssi
  • Mustafa Dah
  • Mohammad Jizi

Abstract

Purpose - As pressures mount for women directors on corporate boards (WDOCBs) from different stakeholders, companies become more interested in finding out how WDOCBs impact sustainability disclosure. The purpose of this paper is to investigate the effect of gender-diverse boards on the association between sustainability reporting and shareholders’ welfare. Design/methodology/approach - This paper examines the implications of women on board for firm-related factors, particularly environmental, social and governance (ESG) disclosure and firm performance. The firms studied are all listed in the Financial Times Stock Exchange 350 index between 2007 and 2012. Bloomberg social disclosure score is used and panel data through a regression model are applied. Findings - The results reveal that the presence of WDOCBs favorably influences on firm’s risk and performance through promoting a firm’s investment in effectual social engagements and reporting on them. The desirable effect of WDOCB on the ESG-performance relationship leads to increased risk-adjusted and buy-and-hold abnormal returns and reduced firm risks, measured by both volatility of returns and systematic risk. Originality/value - The research contributes to the literature on the relationship between women participation on corporate boards and firms’ good citizenship and enhanced shareholders’ welfare. The empirical findings contribute to providing statistical and economical validity to the UK Corporate Governance Code 2014 recommendation on the importance of board gender diversity for effective board functioning.

Suggested Citation

  • Mahmoud Arayssi & Mustafa Dah & Mohammad Jizi, 2016. "Women on boards, sustainability reporting and firm performance," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 7(3), pages 376-401, September.
    • Handle: RePEc:eme:sampjp:sampj-07-2015-0055
    DOI: 10.1108/SAMPJ-07-2015-0055
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    Citations

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    Cited by:

    1. Bigelli, Marco & Mengoli, Stefano & Sandri, Sandro, 2023. "ESG score, board structure and the impact of the non-financial reporting directive on European firms," Journal of Economics and Business, Elsevier, vol. 127(C).
    2. Jagvinder Singh & Varda Sardana & Shubham Singhania, 2024. "Beyond compliance: the business case for gender diversity on boards and sustainability reporting in India," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 15(6), pages 2284-2293, June.
    3. Mustafa K. Yilmaz & Umit Hacioglu & Ekrem Tatoglu & Mine Aksoy & Selman Duran, 2023. "Measuring the impact of board gender and cultural diversity on corporate governance and social performance: evidence from emerging markets," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(2), pages 2106503-210, December.
    4. Antonio García-Amate & Alicia Ramírez-Orellana & Alfonso A. Rojo-Ramírez & M. Pilar Casado-Belmonte, 2023. "Do ESG controversies moderate the relationship between CSR and corporate financial performance in oil and gas firms?," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.
    5. Abbasi, Kaleemullah & Alam, Ashraful & Borhan Uddin Bhuiyan, Md. & Tariqul Islam, Md, 2024. "Does female director expertise on audit committees matter for carbon disclosures? Evidence from the United Kingdom," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 55(C).
    6. Nurshahirah Abd Majid & Amar Hisham Jaaffar & Raed Hussam Mansour Alzoubi, 2023. "The Impact of Women’s Role in Corporate Governance on Carbon Disclosure Performance: A Descriptive Study of Top 100 Global Energy Leaders," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 404-417, November.
    7. Pruthiranjan Dwibedi & Debasis Pahi & Antarjyami Sahu, 2024. "Mapping the landscape of environmental, social and governance research: A bibliometric analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 3745-3767, September.
    8. Ahmad Yuosef Alodat & Zalailah Salleh & Haitham Nobanee & Hafiza Aishah Hashim, 2023. "Board gender diversity and firm performance: The mediating role of sustainability disclosure," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 2053-2065, July.
    9. Shubham Singhania & Jagvinder Singh & Deepti Aggrawal, 2023. "Gender diversity on board and corporate sustainability: a quantitative review based on bibliometric mapping," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 14(1), pages 267-286, February.
    10. Salvatore Esposito De Falco & Raffaella Montera & Sabrina Leo & Francesco Laviola & Pietro Vito & Domenico Sardanelli & Gianpaolo Basile & Giulia Nevi & Raffaele Alaia, 2024. "Trends and patterns in ESG research: A bibliometric odyssey and research agenda," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 3703-3723, September.
    11. Beloskar, Ved Dilip & Haldar, Arunima & Gupta, Anupama, 2024. "Gender equality and women’s empowerment: A bibliometric review of the literature on SDG 5 through the management lens," Journal of Business Research, Elsevier, vol. 172(C).
    12. Jonathan Taglialatela & Kevin Pirazzi Maffiola & Roberto Barontini & Francesco Testa, 2023. "Board of Directors' characteristics and environmental SDGs adoption: an international study," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2490-2506, September.
    13. Pistolesi, Francesco & Teti, Emanuele, 2024. "Shedding light on the relationship between ESG ratings and systematic risk," Finance Research Letters, Elsevier, vol. 60(C).
    14. Paolo Agnese & Francesca Romana Arduino & Massimiliano Cerciello & Simone Taddeo, 2024. "Does board knowledge matter for ESG performance in the European banking industry?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4454-4468, September.
    15. Mariasole Bannò & Emilia Filippi & Sandro Trento, 2023. "Women in top echelon positions and their effects on sustainability: a review, synthesis and future research agenda," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(1), pages 181-251, March.
    16. Mehmood, Asad & De Luca, Francesco & Quach, Hao, 2023. "Investigating how board gender diversity affects environmental, social and governance performance: Evidence from the utilities sector," Utilities Policy, Elsevier, vol. 83(C).

    More about this item

    Keywords

    Risk; Firm value; Environmental; Social and governance disclosure; Women board directors; G32; J16;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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