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Gender diversity in the boardroom and earnings management during the period of the COVID-19 crisis

Author

Listed:
  • Toni Šušak

    (University Department of Forensic Sciences, University of Split, Split, Croatia)

  • Tomislava Paviæ Kramariæ

    (University Department of Forensic Sciences, University of Split, Split, Croatia)

  • Marijana Bartuloviæ

    (University Department of Forensic Sciences, University of Split, Split, Croatia)

Abstract

This paper investigates the effect of the COVID-19 crisis on the relationship between gender diversity in management and supervisory boards and the level of earnings management. The research sample comprised companies listed on the Croatian national stock exchange, and the panel data was obtained for the 2015-2020 period to estimate regression models. Findings indicated that the presence and higher share of female directors on management boards were beneficial for curtailing earnings management but only for the financial statements disclosed during the first year of the COVID-19 pandemic. At that time, such effort was vital due to the escalation of earnings management caused by extremely pessimistic economic expectations. In the financial statements disclosed during the second year of the pandemic, the level of earnings management considerably declined, and female directors were not as effective in restraining these activities as in the first year. It could imply greater prudence of female directors when anticipating the intensity of public scrutiny regarding financial statements in a period of crisis. Gender diversity in supervisory boards proved to be an insignificant determinant of earnings management during the COVID-19 crisis.

Suggested Citation

  • Toni Šušak & Tomislava Paviæ Kramariæ & Marijana Bartuloviæ, 2023. "Gender diversity in the boardroom and earnings management during the period of the COVID-19 crisis," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 41(1), pages 41-63.
    • Handle: RePEc:rfe:zbefri:v:41:y:2023:i:1:p:41-63
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    COVID-19 crisis; boardroom; earnings management; gender; diversity;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • 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
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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