Earnings Forecasts of Female CEOs: Quality and Consequences

Abstract

This study examines the voluntary disclosure of earnings forecasts by female CEOs.
We find that in the backdrop of increased pressure to perform from investors and other
stakeholders, female CEOs tend to issue more earnings forecasts than male CEOs, and
those forecasts are more accurate. We also find that while financial analysts generally
prefer to follow companies headed by male CEOs, female CEOs’ efforts to issue
accurate earnings forecasts pay off, as these efforts help them close the analyst coverage
gap. We provide complementary evidence on the disclosure efforts of female CEOs
with regard to updates to the forecast and the 10-K report. Lastly, we show that
financial analysts rely more on the earnings forecasts of female CEOs, possibly because
they recognize female CEOs’ superior forecasting quality. Our results are robust to the
use of alternative research designs, including difference-in-difference, propensity score
matching, and entropy balancing. Overall, our study documents gender differences in
voluntary disclosure by senior management.

Keywords: Female CEO; voluntary disclosure; management forecast; management forecast errors; analyst following; analyst forecasts

JEL Classification: D22, G17, M14, M41