Board Gender Diversity and Financial Reporting Quality

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Published Jun 1, 2024
https://doi.org/10.61506/02.00275
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Vol. 10 No. 2 (2024): Journal of Policy Research

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Waseem Subhani
Institute of Business Administration, University of the Punjab, Lahore, Pakistan
Ali Amin
Pakistan Kidney and Liver Transplant Institute, Lahore, Pakistan
Muhammad Azeem Naz
School of Commerce and Accountancy University of Management and Technology, Lahore, Pakistan
Muhammad Umair Nazir
Minhaj University, Lahore
Nasir Sultan
Department of Management Sciences, University of Gujrat, Pakistan

Abstract

We analyze the impact of board gender diversity on financial reporting quality using Kanter’s framework of group composition. Specifically, we classify boards into skewed, tilted, and balanced categories, and examine how each type influences reporting quality. Using ordinary least squares regression for hypothesis testing and, for robustness, apply critical mass theory and the generalized method of moments estimation. Our findings indicate that gender diversity is positively associated with financial reporting quality. Notably, highest influence is observed in balanced boards with more than 35% female directors. Furthermore, female directors’ presence in audit committee increases financial reporting quality. Overall, our results support Kanter’s framework and critical mass theory, underscoring their significant positive influence.

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This work is licensed under a Creative Commons Attribution 4.0 International License.

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Subhani, W., Amin, A., Azeem Naz, M., Umair Nazir, M. and Sultan, N. 2024. Board Gender Diversity and Financial Reporting Quality. Journal of Policy Research. 10, 2 (Jun. 2024), 607–617. DOI:https://doi.org/10.61506/02.00275.
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