CEO-director ties and board gender diversity: US evidence

Article

Luong, Hoa, Khedmati, Mehdi, Nguyen, Lan Anh, Nigmonov, Asror, Ovi, Nafisa Zabeen and Shams, Syed. 2023. "CEO-director ties and board gender diversity: US evidence." Journal of Behavioral and Experimental Finance. 40. https://doi.org/10.1016/j.jbef.2023.100861
Article Title

CEO-director ties and board gender diversity: US evidence

ERA Journal ID210800
Article CategoryArticle
AuthorsLuong, Hoa, Khedmati, Mehdi, Nguyen, Lan Anh, Nigmonov, Asror, Ovi, Nafisa Zabeen and Shams, Syed
Journal TitleJournal of Behavioral and Experimental Finance
Journal Citation40
Article Number100861
Number of Pages18
Year2023
PublisherElsevier
Place of PublicationNetherlands
ISSN2214-6350
2214-6369
Digital Object Identifier (DOI)https://doi.org/10.1016/j.jbef.2023.100861
Web Address (URL)https://www.sciencedirect.com/science/article/pii/S2214635023000758?dgcid=coauthor
Abstract

The gender legislation enacted around the world has put enormous pressure on companies to increase the number of women on their boards. Employing US firm-specific data, we document a significant negative relationship between CEO-director ties and female representation on the board, suggesting that socially connected directors are detrimental to gender parity in senior management. We find that the situation improves in firms with female directors with valuable attributes while being moderated by CEO characteristics. Cross-sectional analyses reveal that the association is more pronounced during the low board gender diversity periods and for firms that are led by male CEOs or have weak monitoring mechanism. We rule out endogeneity concerns by performing a battery of analyses. The findings remain robust in a range of sensitivity tests. Our study offers practical implications for regulators and top management teams to improve board effectiveness, thus engendering lasting transformational change in the boardroom.

Keywordschief executive officers (CEOs); Independent directors ; Board connection ; Board gender diversity ; Female director
Contains Sensitive ContentDoes not contain sensitive content
ANZSRC Field of Research 2020350299. Banking, finance and investment not elsewhere classified
Byline AffiliationsUniversity of Otago, New Zealand
Monash University
Royal Melbourne Institute of Technology (RMIT)
University of New South Wales
School of Business
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