This study investigates the effect of top management teams' gender diversity on financial flexibility, defined as the downward deviation from predicted target leverage. We find that gender diversity positively associates with financial flexibility. Specifically, management teams with high gender diversity tend to carefully consider all possible risk and growth factors in the decision-making process and reserve financing resources for future contingencies, resulting in reduced borrowing and the establishment of flexible financial structures. We further examine whether this gender diversity effect varies with the firm's external operating environment and find its association with financial flexibility is weaker in high industry competition, strong market forces, and strong legal protection. Our results are robust to alternative gender diversity measures, sensitivity analysis of financial flexibility, and endogeneity issues. We also provide evidence that the effect of gender diversity is different from that of female managers in corporate decisions. Our study contributes to the literature on managerial characteristics by showing how gender diversity affects corporate financing decisions. The findings have practical implications for managers, policymakers, and investors by suggesting measures to improve financial flexibility through adequate managerial diversification. 

Gender diversity and financial flexibility: Evidence from China

Abstract We investigate the impact of corporate governance (CG) on environmental, social, and governance (ESG) performance in the textile industry in developing countries, taking into account the moderating role of technological innovation (TI). Based on institutional theory, we investigated the connection between CG, TI, and ESG performance. The study used secondary data from 197 textile firms in West Africa from 2010 to 2022. Our findings revealed a positive relationship between gender diversity and ESG performance. Similarly, a positive relationship was found between board independence and ESG performance. Contrarily, an inverse connection was found between board size and ESG performance, as well as CEO duality and ESG performance. The study adds to the academic literature on CG and ESG performance by emphasizing the necessity of balancing economic development with social responsibility and environmental preservation. In addition, the study highlights the need to stimulate technological innovation and create an effective governance structure conducive to implementing firms' ecological responsibilities. Lastly, policymakers can adopt the integrated ESG index in measuring firms' sustainability performance across all sectors and regions. 

Unveiling sustainability: <scp>Tech‐infused</scp> governance and <scp>ESG</scp> performance in textile industry

Abstract This study investigates whether female Audit Committee Financial Experts (ACFEs) at Chinese listed companies reduce earnings management by examining their influence under different ownership structures and cross‐listing scenarios. Our findings reveal that female ACFEs negatively affect earnings management, with their impact varying by ownership type. Specifically, female ACFEs in privately owned enterprises (non‐SOEs) are more effective at reducing earnings management than those in state‐owned enterprises (SOEs). Furthermore, our analysis indicates that female ACFEs in cross‐listed firms are better at mitigating earnings management compared with their counterparts in domestically listed firms. These results have significant implications for regulators, market authorities, investors, and corporate managers, highlighting the crucial role of female ACFEs in improving corporate transparency across diverse ownership frameworks and cross‐listing conditions. 

Impact of ownership structure and cross‐listing on the role of female audit committee financial experts in mitigating earnings management

Purpose
Drawing on legitimacy and upper-echelon theory, this paper aims to investigate the moderating role of corporate governance in the relationship between corporate social performance (CSP) and board gender diversity (BGD).

Design/methodology/approach
Using Morgan Stanley Capital International measures of social and governance performance, the authors use 2,950 firm-year observations from US companies for the years 2016–2020 to show that good performance on social issues drives BGD.

Findings
The panel data model indicates that the relationship between CSP and BGD is strengthened when firms display robust corporate governance.

Originality/value
This study contributes to the extant literature through empirical consideration of CSP as a predictor of BGD, a relationship that has rarely been examined. It further highlights the significant role of corporate governance in ensuring that women have access to corporate boards. Discussion and findings highlight that social performance and governance may significantly contribute to the diversity of socially cognizant boards.


Corporate social performance and board gender diversity: the moderating role of governance

The relationship between gender diversity in audit committees and financial reporting quality has become an important theme in corporate governance research. This review consolidates empirical and theoretical evidence on how female representation affects audit quality, earnings management, fraud prevention, tax behavior, and sustainability disclosures. Using a systematic search across Scopus, Web of Science, and Google Scholar, we included peer-reviewed studies published in the last decade. The findings show that gender-diverse audit committees strengthen oversight, reduce misreporting, discourage aggressive tax strategies, and enhance ESG disclosure. Comparative evidence indicates stronger effects in developed economies with regulatory mandates, while cultural and institutional barriers in developing markets often limit effectiveness. Unlike previous reviews, this study highlights the combined influence of gender diversity on financial integrity and sustainability reporting, offering an integrated governance perspective. Policy implications include the adoption of gender quotas, leadership training for women, and mandatory disclosure of board diversity. Future research should explore longitudinal trends, sectoral variations, and mechanisms linking gender diversity with governance outcomes. 

pdf/gender-diversity-in-audit-committees-and-its-impact-on-5tf6hd85i418.pdf

Gender Diversity in Audit Committees and Its Impact on Financial Reporting Quality: A Narrative Review

The main objective of this study is to analyse the moderating effect of corporate board gender diversity on firm value for 1490 European listed companies between 2016 and 2018. The aim is to investigate whether companies that have different subcommittees (Audit, Corporate Governance, Nomination and Compensation), or that have financial expertise on the audit committee, see increases or decreases in firm value due to the moderating effect of gender diversity. The most striking evidence reveals that the effect of gender diversity on corporate boards, considering all countries in the European sample, could positively impact firm value by moderating the corporate governance and compensation committees. In contrast, when grouped by governance structure, only in the case of one-tier boards is the moderating effect on the governance committee determinant. Likewise, this moderating effect on the compensation committee may increase firm value, but only in countries with two-tier corporate boards. On the other hand, our results suggest that the moderating role of women directors on the audit committee with financial expertise and on the nomination committee, while not increasing firm value, could prevent its further decline by acting as a shield for the Nordic and two-tier groups, respectively. Our findings have important implications for company managers, as these subcommittees could exert a positive influence on the decision-making process, such as reducing information asymmetries and agency costs. 

Do board subcommittees boost European firm value? The moderating role of gender diversity on boards

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Do board subcommittees boost European firm value? The moderating role of gender diversity on boards