Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash

Ibtissem Jilani

doi:doi:10.11648/j.ijafrm.20240903.11

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Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash

Ibtissem Jilani^*

Published in International Journal of Accounting, Finance and Risk Management (Volume 9, Issue 3)

Received: 25 June 2024 Accepted: 29 July 2024 Published: 27 August 2024

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Abstract

This paper provides novel and comprehensive evidence regarding the impact of board gender diversity on the valuation of excess cash in companies. By analyzing a robust dataset of publicly listed firms in France from 2005 to 2017, the study finds that companies with a higher representation of women on their boards tend to significantly increase the value attributed to their excess cash reserves. The results suggest that investors perceive these companies as more capable of managing their cash efficiently, leading to a higher valuation. This perception likely stems from the belief that diverse boards contribute to better decision-making processes, which in turn enhances the effectiveness of cash utilization. Furthermore, the study uncovers that the positive relationship between board gender diversity and the valuation of excess cash is even more pronounced in firms that demonstrate high earnings quality. This finding underscores the importance of a transparent and reliable informational environment in strengthening the link between gender diversity and the efficient use of corporate resources. The research contributes to the broader corporate governance literature by emphasizing the critical role of board gender diversity in not only promoting effective cash management but also in increasing overall firm value through improved investor confidence and resource allocation strategies.

Published in	International Journal of Accounting, Finance and Risk Management (Volume 9, Issue 3)
DOI	10.11648/j.ijafrm.20240903.11
Page(s)	69-78
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Gender Diversity, Value of Excess Cash, Board of Directors, Earning Quality

References

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APA Style

Jilani, I. (2024). Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash. International Journal of Accounting, Finance and Risk Management, 9(3), 69-78. https://doi.org/10.11648/j.ijafrm.20240903.11

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ACS Style

Jilani, I. Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash. Int. J. Account. Finance Risk Manag. 2024, 9(3), 69-78. doi: 10.11648/j.ijafrm.20240903.11

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AMA Style

Jilani I. Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash. Int J Account Finance Risk Manag. 2024;9(3):69-78. doi: 10.11648/j.ijafrm.20240903.11

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@article{10.11648/j.ijafrm.20240903.11,
  author = {Ibtissem Jilani},
  title = {Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash
},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {9},
  number = {3},
  pages = {69-78},
  doi = {10.11648/j.ijafrm.20240903.11},
  url = {https://doi.org/10.11648/j.ijafrm.20240903.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20240903.11},
  abstract = {This paper provides novel and comprehensive evidence regarding the impact of board gender diversity on the valuation of excess cash in companies. By analyzing a robust dataset of publicly listed firms in France from 2005 to 2017, the study finds that companies with a higher representation of women on their boards tend to significantly increase the value attributed to their excess cash reserves. The results suggest that investors perceive these companies as more capable of managing their cash efficiently, leading to a higher valuation. This perception likely stems from the belief that diverse boards contribute to better decision-making processes, which in turn enhances the effectiveness of cash utilization. Furthermore, the study uncovers that the positive relationship between board gender diversity and the valuation of excess cash is even more pronounced in firms that demonstrate high earnings quality. This finding underscores the importance of a transparent and reliable informational environment in strengthening the link between gender diversity and the efficient use of corporate resources. The research contributes to the broader corporate governance literature by emphasizing the critical role of board gender diversity in not only promoting effective cash management but also in increasing overall firm value through improved investor confidence and resource allocation strategies.
},
 year = {2024}
}

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TY  - JOUR
T1  - Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash

AU  - Ibtissem Jilani
Y1  - 2024/08/27
PY  - 2024
N1  - https://doi.org/10.11648/j.ijafrm.20240903.11
DO  - 10.11648/j.ijafrm.20240903.11
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 69
EP  - 78
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20240903.11
AB  - This paper provides novel and comprehensive evidence regarding the impact of board gender diversity on the valuation of excess cash in companies. By analyzing a robust dataset of publicly listed firms in France from 2005 to 2017, the study finds that companies with a higher representation of women on their boards tend to significantly increase the value attributed to their excess cash reserves. The results suggest that investors perceive these companies as more capable of managing their cash efficiently, leading to a higher valuation. This perception likely stems from the belief that diverse boards contribute to better decision-making processes, which in turn enhances the effectiveness of cash utilization. Furthermore, the study uncovers that the positive relationship between board gender diversity and the valuation of excess cash is even more pronounced in firms that demonstrate high earnings quality. This finding underscores the importance of a transparent and reliable informational environment in strengthening the link between gender diversity and the efficient use of corporate resources. The research contributes to the broader corporate governance literature by emphasizing the critical role of board gender diversity in not only promoting effective cash management but also in increasing overall firm value through improved investor confidence and resource allocation strategies.

VL  - 9
IS  - 3
ER  -

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Author Information

Ibtissem Jilani

Higher Institute of Management, University of Sousse, Sousse, Tunisia

Contact Email

http://orcid.org/0000-0001-9005-5432

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APA Style

Jilani, I. (2024). Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash. International Journal of Accounting, Finance and Risk Management, 9(3), 69-78. https://doi.org/10.11648/j.ijafrm.20240903.11

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ACS Style

Jilani, I. Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash. Int. J. Account. Finance Risk Manag. 2024, 9(3), 69-78. doi: 10.11648/j.ijafrm.20240903.11

Copy | Download

AMA Style

Jilani I. Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash. Int J Account Finance Risk Manag. 2024;9(3):69-78. doi: 10.11648/j.ijafrm.20240903.11

Copy | Download

@article{10.11648/j.ijafrm.20240903.11,
  author = {Ibtissem Jilani},
  title = {Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash
},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {9},
  number = {3},
  pages = {69-78},
  doi = {10.11648/j.ijafrm.20240903.11},
  url = {https://doi.org/10.11648/j.ijafrm.20240903.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20240903.11},
  abstract = {This paper provides novel and comprehensive evidence regarding the impact of board gender diversity on the valuation of excess cash in companies. By analyzing a robust dataset of publicly listed firms in France from 2005 to 2017, the study finds that companies with a higher representation of women on their boards tend to significantly increase the value attributed to their excess cash reserves. The results suggest that investors perceive these companies as more capable of managing their cash efficiently, leading to a higher valuation. This perception likely stems from the belief that diverse boards contribute to better decision-making processes, which in turn enhances the effectiveness of cash utilization. Furthermore, the study uncovers that the positive relationship between board gender diversity and the valuation of excess cash is even more pronounced in firms that demonstrate high earnings quality. This finding underscores the importance of a transparent and reliable informational environment in strengthening the link between gender diversity and the efficient use of corporate resources. The research contributes to the broader corporate governance literature by emphasizing the critical role of board gender diversity in not only promoting effective cash management but also in increasing overall firm value through improved investor confidence and resource allocation strategies.
},
 year = {2024}
}

Copy | Download

TY  - JOUR
T1  - Capitalizing on Diversity: The Impact of Board Gender Diversity on the Value of Excess Cash

AU  - Ibtissem Jilani
Y1  - 2024/08/27
PY  - 2024
N1  - https://doi.org/10.11648/j.ijafrm.20240903.11
DO  - 10.11648/j.ijafrm.20240903.11
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 69
EP  - 78
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20240903.11
AB  - This paper provides novel and comprehensive evidence regarding the impact of board gender diversity on the valuation of excess cash in companies. By analyzing a robust dataset of publicly listed firms in France from 2005 to 2017, the study finds that companies with a higher representation of women on their boards tend to significantly increase the value attributed to their excess cash reserves. The results suggest that investors perceive these companies as more capable of managing their cash efficiently, leading to a higher valuation. This perception likely stems from the belief that diverse boards contribute to better decision-making processes, which in turn enhances the effectiveness of cash utilization. Furthermore, the study uncovers that the positive relationship between board gender diversity and the valuation of excess cash is even more pronounced in firms that demonstrate high earnings quality. This finding underscores the importance of a transparent and reliable informational environment in strengthening the link between gender diversity and the efficient use of corporate resources. The research contributes to the broader corporate governance literature by emphasizing the critical role of board gender diversity in not only promoting effective cash management but also in increasing overall firm value through improved investor confidence and resource allocation strategies.

VL  - 9
IS  - 3
ER  -

Copy | Download