Female Board Characteristics Based On Company Online Reporting: Do Overseas Education And Length Of Tenure Reduce Return Volatility?

Abstract

Purpose: We test whether the characteristics of female directors, such as foreign education of female directors and female directors' tenure can moderate the relationship between board gender diversity and stock return volatility.

Methods: The present study utilizes a multifaceted methodological approach encompassing fixed-effects panel regression and moderation analysis to assess the impact of female board characteristics on stock return volatility. The model assesses the moderating effect of gender diversity on financial risk, with board attributes such as international education and tenure serving as moderating variables.

Results: We also find that return volatility is strongly curbed by board gender diversity, especially when female board members have international education or longer tenure. The results of our moderation analysis test show that overseas education moderates the negative effect of gender diversity on firm risk, whereas tenure moderates that on firm strategy stability. Moderating effects of other characteristics (i.e., education level and financial background) are more modest. These findings imply that the presence of internationally educated and long-tenured women on gender-diverse boards can help firms to mitigate the financial uncertainty.

Novelty: This study contributes to the gender governance literature by introducing the multidimensional female board profiles and by stressing that diversity needs to be situated in global competence and experience. It leaves the field of symbolic diversity for the battlefield of strategic inclusion.

Global Implications and Benefits: The study provides valuable implications to emerging markets seeking to attract the global capital and support with the ESG and SDG 5 objectives. Policy makers, institutional investors and international finance institutions can use board education and tenure as quality of governance indicator to assess firm's resilience.