A Few Good (Wo)men? Gender Diversity on Australian Boards

Posted: 25 Aug 2017

See all articles by Maria Strydom

Maria Strydom

Monash University

Hue Hwa Au Yong

Monash University - Department of Banking and Finance; Financial Research Network (FIRN)

Michaela Rankin

Monash University

Date Written: October 26, 2016

Abstract

This article examines the relation between gender diversity and earnings quality for Australian firms from 2005 to 2013. We draw on the work of Kanter, highlighting the importance of the proportion of women on the board when measuring diversity. We show that all-male and skewed boards have lower earnings quality while that of tilted and balanced boards is higher. In addition, a critical mass of women is achieved when some 30% of directors are females. Performance and risk do not influence the relation. We contribute by presenting evidence supporting critical mass theory. Furthermore, our work adds to the recent debate on whether the association between gender diversity and earnings quality is U-shaped, rather than linear. Our results have implications for regulation and practice. We identify the need for a critical mass of women, rather than tokens, to enhance earnings quality.

Keywords: Critical Mass, Earnings Quality, Firm Performance, Gender Diversity

JEL Classification: G30, J16, M41

Suggested Citation

Strydom, Maria and Au Yong, Hue Hwa and Rankin, Michaela, A Few Good (Wo)men? Gender Diversity on Australian Boards (October 26, 2016). Australian Journal of Management, Vol. 42, No. 3, 2107, Available at SSRN: https://ssrn.com/abstract=3024508

Maria Strydom (Contact Author)

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Hue Hwa Au Yong

Monash University - Department of Banking and Finance ( email )

PO Box 197
Caulfield East, Victoria 3145
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Michaela Rankin

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

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