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Does the gender of board members influence the choice of sustainability report format of listed firms? Empirical evidence from India

Does the gender of board members influence the choice of sustainability report format of listed... This study examines the effect of gender board characteristics on the choice of sustainability report format in India. A sustainability report covers the environmental and social impacts of firms. It is presented either as an integrated report with the rest of the financial reporting to stakeholders or a separate document (stand-alone) with the advantage of communicating better information.Design/methodology/approachThe study uses an inclusive sample of 800 firm-year observations between 2010 and 2019. The study applies the binary probit and the instrumental variable probit regressions to analyse the data from the Indian Stock Exchange.FindingsThe authors find that female chief executive officers (CEOs) are more likely to choose stand-alone reports over integrated reporting. The authors also find that female CEOs with a duality role are insignificant in choosing between integrated reporting and stand-alone sustainability reporting. Furthermore, the study shows that gender board diversity (percentage of women over total board size) and females of two or less are insignificant. However, three or more females on the board significantly and positively affect stand-alone sustainability reporting. Similarly, independent female directors are more likely to choose stand-alone reporting over integrated reporting. Policymakers must encourage sensitive environmental firms to employ more female CEOs over male CEOs because female CEOs are more likely to adopt stand-alone sustainability reporting.Originality/valueThe authors’ study adds novelty to research because previous studies have only examined a female CEO and sustainability. However, this study is the first to investigate female CEOs' and female board members' choice of sustainability report format. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Finance Emerald Publishing

Does the gender of board members influence the choice of sustainability report format of listed firms? Empirical evidence from India

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References (80)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0307-4358
DOI
10.1108/mf-05-2022-0242
Publisher site
See Article on Publisher Site

Abstract

This study examines the effect of gender board characteristics on the choice of sustainability report format in India. A sustainability report covers the environmental and social impacts of firms. It is presented either as an integrated report with the rest of the financial reporting to stakeholders or a separate document (stand-alone) with the advantage of communicating better information.Design/methodology/approachThe study uses an inclusive sample of 800 firm-year observations between 2010 and 2019. The study applies the binary probit and the instrumental variable probit regressions to analyse the data from the Indian Stock Exchange.FindingsThe authors find that female chief executive officers (CEOs) are more likely to choose stand-alone reports over integrated reporting. The authors also find that female CEOs with a duality role are insignificant in choosing between integrated reporting and stand-alone sustainability reporting. Furthermore, the study shows that gender board diversity (percentage of women over total board size) and females of two or less are insignificant. However, three or more females on the board significantly and positively affect stand-alone sustainability reporting. Similarly, independent female directors are more likely to choose stand-alone reporting over integrated reporting. Policymakers must encourage sensitive environmental firms to employ more female CEOs over male CEOs because female CEOs are more likely to adopt stand-alone sustainability reporting.Originality/valueThe authors’ study adds novelty to research because previous studies have only examined a female CEO and sustainability. However, this study is the first to investigate female CEOs' and female board members' choice of sustainability report format.

Journal

Managerial FinanceEmerald Publishing

Published: Feb 24, 2023

Keywords: Gender board diversity; Female directors; Independent female directors; Critical mass theory; Resource dependency theory; Sustainability report format; Female CEOs and duality

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