Board Gender Diversity and Financial Reporting Quality: Empirical Evidence from Nigeria

ONATUYEH ARUOBOGHA EDWIN; PROSO TIMOTHY

Volume : VIII, Issue : IV, April - 2019

Board Gender Diversity and Financial Reporting Quality: Empirical Evidence from Nigeria

Onatuyeh Aruobogha Edwin, Proso Timothy

Abstract :

The significance of corporate boards in the discharge of their supervisory functions to firms� success cannot be overemphasized. However, the composition of such boards for effective performance has been criticised severally overtime. Studies have reported findings in support of the view that boards perform better when they are gender-diverse. Therefore, this study examines the correlation between board gender diversity and financial reporting quality with the aim of ascertaining whether the presence of women on corporate boards positively influences the quality of financial reporting by firms. While financial reporting quality was measured using the IASB qualitative characteristics model, we used the ratio of women board members to total board members, Blua diversity and Shannon diversity indexes as surrogates for gender diversity. Based on data gleaned from the audited annual reports of fourteen selected listed Nigerian Deposit Money Banks for the period 2013 to 2017, results of the system Generalized Method Moments (GMM) regression technique revealed a positive relationship between gender diversity on boards and quality of financial reporting by banks in Nigeria. However, the result of the study did not provide evidence of significant connection between board independence and financial reporting quality. This study concludes with a number of recommendations, including suggesting the need for firms to include more female members in the board as they tend to have a significant impact on the quality of decision making as well as inging a new perspective to deliberation processes.