Female Board Leadership, Firm Performance, and Corporate Governance: Evidence from China
59 Pages Posted: 6 Nov 2018 Last revised: 22 Jul 2019
Date Written: July 5, 2019
Using a large sample of Chinese firms, we examine performance differences between firms with female and male chairs and the channels through which such differences arise. After controlling for the presence of female CEOs and non-chair female directors, we find that chairwoman firms perform better than chairman firms. Boards led by chairwomen also play not only a more effective supervisory role (as evidenced by a higher likelihood of director dissension, a lower likelihood of committing accounting fraud, and higher forced CEO turnover- and pay-performance sensitivity) but also a more active managerial role (as evidenced by more value-enhancing risky investment, more innovation activities, and more effective responses to industry-wide shocks). Moreover, the presence of women on boards as chairs is associated with better attendance behavior among independent directors. These results, which are robust to controlling for the self-selection biases and board gender diversity documented in prior literature, suggest that chairwomen play a more effective leadership role than chairmen in board decision making.
Keywords: Female chairperson, Board diversity, Firm performance, Corporate governance, Director dissension, Accounting fraud, Forced CEO turnover, Risk taking
JEL Classification: G20, G30, G32, G34
Suggested Citation: Suggested Citation