Who Selects the ‘Right’ Directors? An Examination of the Association between Board Selection, Gender Diversity and Outcomes

33 Pages Posted: 18 Jan 2016

See all articles by Marion R. Hutchinson

Marion R. Hutchinson

Queensland University of Technology - QUT Business School

Janet Mack

Queensland University of Technology - School of Accountancy

Kevin Patrick Plastow

Queensland University of Technology - School of Accountancy

Date Written: December 2015

Abstract

Using a sample of companies from the top 500 listed firms in Australia, we investigate whether the presence of a designated nomination committee and female representation on the nomination committee affect board gender diversity. We also examine whether gender diversity on the board affects firm risk and financial performance. We find that board gender diversity is significantly and positively associated with the presence of a designated nomination committee and that female representation on the nomination committee is a significant explanatory factor of increasing board gender diversity following the release of the 2010 Australian Securities Exchange Corporate Governance Council (ASXCGC) recommendations. Further, our results support the business case for board gender diversity as we find greater gender diversity moderates excessive firm risk which in turn improves firms' financial performance. Our results are robust after correcting for selection bias and controlling for other board, firm and industry characteristics.

Keywords: Nomination committee, Board gender diversity, Firm performance

Suggested Citation

Hutchinson, Marion R. and Mack, Janet and Plastow, Kevin Patrick, Who Selects the ‘Right’ Directors? An Examination of the Association between Board Selection, Gender Diversity and Outcomes (December 2015). Accounting & Finance, Vol. 55, Issue 4, pp. 1071-1103, 2015. Available at SSRN: https://ssrn.com/abstract=2716404 or http://dx.doi.org/10.1111/acfi.12082

Marion R. Hutchinson (Contact Author)

Queensland University of Technology - QUT Business School ( email )

GPO Box 2434
Brisbane, Queensland 4001
Australia
0417548273 (Phone)

Janet Mack

Queensland University of Technology - School of Accountancy ( email )

2 George Street
Brisbane, Queensland 4000
Australia

Kevin Patrick Plastow

Queensland University of Technology - School of Accountancy ( email )

2 George Street
Brisbane, Queensland 4000
Australia

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
730
PlumX Metrics