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Female representation on boards and CEO performance‐induced turnover: Evidence from Russia
Author(s) -
Kim Oksana,
Kuang Yu Flora,
Qin Bo
Publication year - 2020
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/corg.12316
Subject(s) - diligence , representation (politics) , patience , value (mathematics) , affect (linguistics) , business , accounting , enterprise value , shareholder , sample (material) , corporate governance , public relations , psychology , political science , social psychology , finance , law , chemistry , communication , chromatography , machine learning , politics , computer science
Research Question/Issue This study examines the influence of female board representation on CEO turnover and firm value. We focus on Russia, a patriarchal country with vast gender differences, where empathy, patience, and supportiveness are considered fundamental qualities of females. Research Findings/Insights Using a sample of public firms listed on the Moscow Exchange from 2006 to 2015, we find that female representation on boards is associated with lower CEO turnover–performance sensitivity. Further, female boards appear to add firm value, as we find that CEO retention decisions are associated with improved future firm value when the decision is made by a female board. Furthermore, we identify that female representation on boards is associated with greater diligence (i.e., hold more board meetings) after retaining their underperforming CEOs. Theoretical/Academic Implications Our findings suggest that female boards tend to develop a long‐term view of CEO performance and that such boards exercise greater diligence and supportiveness, thereby adding shareholder value. Our results also indicate that patience and collaboration of corporate boards afford opportunities to develop strategic thinking, which is particularly valuable for a firm in times of crisis. Our study contributes to the research on what qualities of a board affect its decision making and effectiveness. Our research also adds to the literature on female board representation. We study Russia, where gender differences are prominent, and female representation occurs by happenstance rather than regulatorily / intentionally. Overall, we are able to attribute our findings to female representation on boards. Practitioner/Policy Implications Our study contributes to the burgeoning research on corporate governance in Russia. Although the Russian economy has demonstrated unprecedented growth among emerging markets, research on corporate governance in Russia remains scarce. Our study is among the first efforts to understand how female boards perform in a patriarchal country. Our investigation, therefore, offers important insights for policymakers and practitioners.