Female Directors, Board Committees, and Firm Performance: Time-Series Evidence from Turkey

58 Pages Posted: 25 Nov 2019 Last revised: 22 Dec 2019

See all articles by Melsa Ararat

Melsa Ararat

Sabanci University - Sabancı Business School, Corporate Governance Forum

B. Burcin Yurtoglu

WHU - Otto Beisheim School of Management

Date Written: November 13, 2019

Abstract

We study the relationship between female representation on boards and firm value and profitability in Turkey from 2011 to 2018, relying on hand-collected data covering the vast majority of listed firms. We build several proxies of female representation on boards and find no evidence that female directors predict firm value and profitability using broad measures that are typically required or mandated by regulators. However, we find that female directors predict higher firm value when they have a more active role in board governance through board committee memberships and when they are represented in these committees in relatively large numbers. The presence of female directors, who are members of controlling families is associated with higher firm value. The presence of female independent directors is associated with higher profitability. We also study three potential channels through which female directors might influence firm outcomes and find that the presence of female directors on boards and board committees (i) facilitates the production of financial statements of higher quality; (ii) may lead to lesser incidence of violations of capital market laws and regulations, and (iii) reduces the hoarding of negative news and the related stock price crash risk. We also compare female directors to their male counterparts and find limited evidence for systematic differences.

Keywords: Turkey, board gender diversity, board committees, corporate governance, firm performance

JEL Classification: G18, G30, G34, G39, K22, K29

Suggested Citation

Ararat, Melsa and Yurtoglu, B. Burcin, Female Directors, Board Committees, and Firm Performance: Time-Series Evidence from Turkey (November 13, 2019). Available at SSRN: https://ssrn.com/abstract=3486091 or http://dx.doi.org/10.2139/ssrn.3486091

Melsa Ararat

Sabanci University - Sabancı Business School, Corporate Governance Forum ( email )

Orhanli Tuzla
Istanbul, Orhanli, Tuzla 34956
Turkey
+90-2164839710 (Phone)
+90-2164839715 (Fax)

HOME PAGE: http://www.sabanciuniv.edu

B. Burcin Yurtoglu (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Chair of Corporate Finance
Burgplatz 2
Vallendar, 56179
Germany
+49 261 6509-721 (Phone)
+49 261 6509-729 (Fax)

HOME PAGE: http://www.whu.edu/forschung/fakultaet/finance-group/corporate-finance/

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