Do Female Members on Board Lead to a Sustainable Integrated ‎Report?‎

Introduction Financial Crisis Reform actions to enhance the quality of ‎corporate governance Action Change their business reporting which does not only addressed to shareholders, but also market labour, ‎business parties, and society. ‎ Benefit Helps to overcome the shortcomings of ‎conventional ‎approaches to disclosure, by extending the ‎concept financial disclosure to the sustainability and eco-system. The adoption of governance practices may provide new chance for sustainable report disclosure. Question While (El-Chaarani, 2014) argue that disclosure and corporate governance practices are known of being the most ‎significant mechanisms that reduce the hiding and manipulating information related to the firm’s financial ‎and non-financial situation ‎.Terjesen et al. (2009) argue that the effect of gender diversity on boards lead to effective governance. From that two fact our question is arise: Do Female Members on Board Lead to a Sustainable Integrated ‎Report?‎ Amina Mohamed Buallay

Introduction GAP Research Objective Contribution Implication The current theories and studies pretend to be inefficient so far in determining how board diversity affect the sustainable ‎reporting’s taking into consideration different environments, cultures and regions. Research Objective This study investigates empirically the capability of gender diversity to support the sustainable ‎integrated reporting disclosure (Environmental, Social and Governance practices). Contribution This study improve our understanding of corporate governance in ‎practice as a basis for scout about how sustainable reports are disclosed. Implication The results of this study can used to present a successful model for firms to enhance and ‎concentrate on the role of gender diversity in enhancing the sustainability disclosure. The is study may bring legitimacy to the International ‎Integrated Reporting Council and Governance Code‎ Amina Mohamed Buallay

Literature review: Significance of Board Diversity Negative side of Gender Diversity Positive side of Gender Diversity Farrell and Hersch (2005): stricter monitors and this will decrease the agency problems Anderson et al. (2011): efficient controlling for stakeholders and managers Jia and Zhang (2013): better resistance to corporate risks Gul et al. (2011): enhance communication O’Reilly et al. (1989) and Lang (1986): cause communication problems. Amina Mohamed Buallay

Literature review: Gender Diversity and Disclosure Bear et al. (2010): strength the firm’s CSR rating. Eagly et al. (2003) and Eagly and Johnson (1990): facilitate more informed decisions Rudman and Glick (2001): more sensitive to corporate social responsibility and environmental issues Frias-Aceituno et al. (2013): positive association between board gender diversity and reporting. Pfeffer and Salancik (1978) positive effect between board gender diversity in the boardroom and the likelihood of voluntary disclosure. Prado and Garcia (2010): no significant influence of gender diversity on the disclosure. Ali et al. (2014): non-linear relationship between voluntary disclosure and gender diversity. Positive Negative Amina Mohamed Buallay

Literature review: Theories linked Governance and Sustainable Reporting Resource Dependency theory suggests that those responsible for recruiting directors seek particular characteristics in new appointees to complement the existing board and to provide connections to new resources to secure the future of the firm (Pfeffer and Salancik, 1978). Resource Dependency Theory Stakeholder Agent theory combines the Agency theory and stakeholder theory. The theory states that sustainability information is expected to reduce information asymmetries and agency cost that emerges between the stakeholders and companies (Shankmann, 1999). Stakeholder Agent Theory Amina Mohamed Buallay

Hypothesis Development In line with the previous empirical studies and the theories supporting both gender diversity and sustainable integrated report disclosure we conclude that gender diversity can lower the conflict of interest and may lead to a more sustainable strategy H1: Female Members in the Board of Directors Increase ESG Disclosure Amina Mohamed Buallay

Study Model Dependent Variables Independent Variables Total Asset Governance GDP Unemployment Financial leverage Independent Variables Dependent Variables Female board between 1 to 20%‎ Female board between 21 to 50%‎ Female board more than 50%‎ Sustainable Disclosure Gender Diversity Control Variables: Bank specific Environmental disclosure Corporate social disclosure Governance disclosure Control Variables: Macroeconomic Amina Mohamed Buallay

Methodology ‎7951‎ Observations ‎2116‎ Listed banks Pooled Data 10 Years (2007-2016) ‎2116‎ Listed banks ‎7951‎ Observations Methodology Top 100 Oil Producer Countries Amina Mohamed Buallay

Data and Model Validity Normality Shapiro–Wilk/ Kolmogorov–Smirnov Collinearity VIF test Autocorrelation Durbin Watson test Heteroscedasticity Breusch-Pagan test Stationarity ADF/ Phillips–Perron Amina Mohamed Buallay

Matt Rosenberg's Official Eight Regional Groupings of the World‎ Descriptive Results Cross-Country Results Matt Rosenberg's Official Eight Regional Groupings of the World‎ Governance Disclosure Social Disclosure Environmental Disclosure Female Board 13.6% 1. Central America 2. Australia 3. Europe Female Board 1. Australia 2. Europe 3.South America ESG Amina Mohamed Buallay

Advanced Descriptive Results Female member is between 21 to 50%, the ESG mean is higher. The ESG and gender diversity mean is better in banks that are located in countries ranking (26 to 75) in oil production. The ESG and gender diversity mean is better in non OPEC countries. The ESG and gender diversity mean is better in low financial leverage banks and high asset size. Amina Mohamed Buallay

Empirical Results Female board is a granger cause of corporate governance disclosure The correlation coefficients of board diversity indicates significant positive associations at 1% level with all ESG indicators. The results reveal that Environmental, Social and Governance models have high statistical significance and high explanatory power Causality Test Correlation Test F- Test Amina Mohamed Buallay

Regression Results Environmental Disclosure Female board between 21 to 50% (+) Social Disclosure Governance Disclosure Female board between 1 to 20% (+) ESG Score Regression Results In line with the Resource Dependence Theory, appointing female directors may enhance company’s ESG as female directors may bring diverse viewpoints , knowledge and experience to the board, thus enhancing the sustainable disclosure. Moreover, the Stakeholder- Agent theory claims that more diversity in board will enhance the ability to disclose more information about the company, preventing it from disclosing self-serving information which negatively affect the performance of the company. Amina Mohamed Buallay

Conclusion Recommendation As noted from the results the board gender diversity is weak; therefore, we recommend the banks to pay more attention to board gender diversity as a contributor toward efficient sustainable disclosure. Future Research As ‎corporate governance is an interdisciplinary field, ‎we suggest that future research has to undertake in the sustainable ‎performance nexus with governance practices such as (board independency, board size .. etc) which is supporting the field of governance and sustainability. Limitation The absence of literature offered the sustainable ‎reporting has associated with gender diversity. ‎ The study use one sector (Financial sector) and ignored others. Amina Mohamed Buallay