Asian Review of Accounting: Article Information

Asian Review of Accounting
Does board gender diversity affect the transparency of corporate political

disclosure?
D.G. DeBoskey, Yan Luo, Jeff Wang,
Article information:
To cite this document:
D.G. DeBoskey, Yan Luo, Jeff Wang, (2018) "Does board gender diversity affect the transparency
of corporate political disclosure?", Asian Review of Accounting, https://doi.org/10.1108/
Downloaded by The University of Texas at El Paso At 20:07 04 November 2018 (PT)
ARA-09-2017-0141
Permanent link to this document:
https://doi.org/10.1108/ARA-09-2017-0141
Downloaded on: 04 November 2018, At: 20:07 (PT)
References: this document contains references to 77 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 1 times since 2018*
Access to this document was granted through an Emerald subscription provided by emerald-
srm:459066 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald
for Authors service information about how to choose which publication to write for and submission
guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as
well as providing an extensive range of online products and additional customer resources and
services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the
Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for
digital archive preservation.
*Related content and download information correct at time of download.

The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1321-7348.htm
Board gender
Does board gender diversity diversity
affect the transparency of
corporate political disclosure?
D.G. DeBoskey, Yan Luo and Jeff Wang
Charles W. Lamden School of Accountancy, San Diego State University,
Received 7 September 2017
San Diego, California, USA Revised 9 December 2017
1 March 2018
28 April 2018
Abstract Accepted 30 April 2018

Purpose – The purpose of this paper is to examine the influence of board gender diversity on the
transparency of corporate political disclosure (CPD).
Design/methodology/approach – Two empirical proxies, CPD transparency and policy transparency, are
constructed from a data set jointly produced by the Center of Political Activity and the Carol and Lawrence
Zicklin Center for Business Ethics Research. The CPD transparency score measures the level of transparency
in voluntary corporate disclosure of the amount of political contributions and the identity of the recipients as
well as the titles and names of the executives who authorize the political spending. The policy transparency
score measures the level of transparency in the voluntary disclosure of the policies governing corporate
political spending. Board gender diversity is measured by the percentage of women on the board of directors.
Findings – Higher proportions of female directors are associated with more transparent disclosure of
political contributions after controlling for a set of corporate governance and firm-level variables.
Originality/value – This study is the first to examine whether and how gender-diversified boards enhance
the transparency of CPD. It contributes to the literature by providing evidence that gender-diversified boards
enhance corporate governance.
Keywords Gender diversity, Disclosure, Political contribution
Paper type Research paper
1. Introduction
Political activism is an important component of a company’s strategy and its ethical climate.
Studies based on international and US settings suggest that political investments help a
company to establish or strengthen its political connections, which can enhance corporate
operational performance and increase access to favorable lending terms (e.g. Faccio et al.,
2006; Goldman et al., 2009, 2013; Duchin and Sosyura, 2012). However, corporate political
spending may come with great risk, as political investments, often solicited in circumstances
that amount to little more than a shakedown, may not pay off. If made public, these
investments can even hurt corporate brands and alienate potential customers and
shareholders who have different political views (Porter, 2015). As a result, corporate political
disclosure (CPD) communicates value relevant but sensitive information that may expose
the corporation to public scrutiny and affect its information risk, reputation cost and
litigation risk (Verrecchia, 1983; Li et al., 1997; Clarkson et al., 2008; Porter, 2015).
The transparent public disclosure of a firm’s corporate political spending is an important
step toward corporate transparency and accountability; it is already strongly encouraged by
shareholder activist groups and is becoming a significant concern to the public and to
regulators[1]. Increasingly, Americans are expressing concern about the power of
corporations and other wealthy donors to influence political candidates. CPD transparency
even became a prevalent talking point in the 2016 race for the White House (Gold, 2015;
O’Connor, 2015). Given the sensitive nature of CPD, it is likely that board members view
CPD as a potentially important tool for managing stakeholders’ demands for the
transparent disclosure of sensitive information (Porter, 2015). Asian Review of Accounting
Recent research on corporate disclosure has focused on how corporate governance © Emerald Publishing Limited
1321-7348
mechanisms enhance the transparency of companies’ voluntary financial and non-financial DOI 10.1108/ARA-09-2017-0141
ARA disclosure (e.g. management forecasts, executive compensation disclosure, corporate social
responsibility (CSR) disclosure and environmental disclosure)[2]. These studies have
demonstrated that governance effectiveness plays a critical role in promoting an ethical
climate, particularly through the enhancement of disclosure transparency (Carcello, 2009;
Vera-Munoz, 2005). Despite these findings, there is a surprising dearth of research on the
determinants of CPD transparency. This study uses stakeholder theory to examine the
association between gender diversity and CPD transparency. Stakeholder theory, which
recognizes the multi-accountability of management to stakeholders with divergent interests
(Liao et al., 2015), is particularly suitable for the study of corporate political activities, which
are associated with complex and ambiguous consequences. Stakeholder groups with
different political preferences and distinct, discrete interests may be differentially affected
by these actions. For example, Min (2016) argues that corporate political activities aimed at
removing constraints on risk taking can, if successful, lead to excessive risk taking that
maximizes shareholders’ benefits at the expense of debtholders’ interests. Corporate political
activity should balance the different interests of various stakeholders, and thus
stakeholders need information about corporate political contributions to ensure that these
contributions are advancing shareholders’ interests and long-term firm value, rather than
the personal political preferences of management (Stein and Maxwell, 2016).
Prior studies of gender diversity suggest that board gender composition is an important
dimension of governance because women and men are traditionally, culturally and socially
different (Liao et al., 2015). For instance, studies have shown that women differ from men in
terms of personality, communication style, educational background, and career experience and
expertise (e.g. Feingold, 1994). It is increasingly recognized that female board members can
positively impact an organization’s socially responsible behavior (Barako et al., 2006; Branco
and Rodrigues, 2008). Liao et al. (2015) and Peters and Romi (2014) suggest that the presence of
female directors is strongly correlated with the transparency of environmental disclosure.
According to stakeholder theory, a board with more gender diversity is likely to be more
representative of discrete stakeholder groups, more capable of promoting transparent CPD
and more likely to meet the information demands of various stakeholder groups. Analogous
to the findings on CSR disclosures in Branco and Rodrigues (2008) and the findings on
environmental disclosure in Peters and Romi (2014), this study posits that board gender
diversity is a governance mechanism that makes boards more representative of the interests
of a diversified range of stakeholders, more responsive to their information needs and more
effective at enhancing CPD transparency. This analysis of a sample of 456 Standard & Poor
(hereafter S&P) 500 companies in the USA from the 2011 to 2015 period provides evidence
that higher gender diversity is positively associated with more transparent CPD. These
results are consistent with stakeholder theory and support the notion that board gender
diversity enhances the transparency of non-financial disclosure (e.g. Gul and Leung, 2004;
Liao et al., 2015; Peters and Romi, 2014).
This study makes several important contributions to academic research. First, it
contributes to the gender diversity literature by shedding light on whether gender diversity
increases board effectiveness. Previous studies of the association between gender diversity
and firm performance have had mixed findings on the impact of gender diversity on board
effectiveness (Post and Byron, 2015)[3]. This study’s findings support the general notion
that appointing female directors enhances the effectiveness of board oversight activities
(Post and Byron, 2015) such as monitoring corporate voluntary disclosure and enhancing
transparency (e.g. Gul and Leung, 2004; Peters and Romi, 2014; Liao et al., 2015). Second, this
study provides archival evidence supporting the findings of meta-analyses in the
psychology literature; specifically, it supports the notion that women, in general, apply
stricter ethical standards than men (Pan and Sparks, 2012) and are more likely to
consider questionable business practice (e.g. opacity in corporate disclosure) as unethical
(Franke et al., 1997). A more gender-diversified board is therefore likely to mandate more Board gender
transparent CPD disclosure in order to inform stakeholders of value-relevant information diversity
and to avoid the legal, ethical or reputational risks associated with withholding such
information. Third, this study demonstrates that the CPD transparency framework
operationalized in this study is fully consistent with prior research on the determinants of
other types of non-financial disclosure (e.g. environmental disclosure or CSR disclosure)
(see Hyun et al., 2014). The CPD data set and the CPD transparency framework developed
and tested in this study can be utilized by future researchers to examine other impacts of
CPD transparency, for example, its impact on debt or equity capital markets.
Moreover, the empirical evidence in this study has important implications to the society
and regulators. By demonstrating that the improvement of women representation in the
boardroom enhances corporate transparency, this study supports the recent trend toward a
more gender-diversified board. The findings should be of interest to regulators and public
policymakers who seek to promote more transparent disclosure of political contributions
and to shed light on the effects of gender diversity on general board effectiveness. The US
research setting provides a unique institutional context for examining firms’ voluntary
disclosure quality. The results have important standard setting implications, even for
countries without similar forms of political contribution.
The rest of this paper is organized as follows. Section 2 presents the related literature and the
study’s main hypothesis. Section 3 describes the research design and sample selection. Section 4
provides the empirical results and sensitivity tests and Section 5 offers concluding remarks.
2. Literature review and hypothesis development

2.1 Gender diversity
Gender diversity in the boardroom has attracted considerable attention in the governance
literature and is increasingly viewed as a significant factor in board effectiveness. Studies
suggest that gender-diverse boards improve board effectiveness for several reasons. First,
female directors, who do not belong to the “old boys’ club,” exhibit greater diligence,
independence and activism and are stricter monitors (Adams and Ferreira, 2009; Carter
et al., 2003; Post and Byron, 2015). Second, as female directors bring different perspectives,
experience and networks to the boardroom, gender-diversified boards are likely to engage in
deeper and more extensive discussions, thus improving boards’ decision making and their
effectiveness in fulfilling board responsibilities (such as oversight and advising) (Huse and
Grethe Solberg, 2006; Rose, 2007; Terjesen et al., 2009; Loyd et al., 2013; Post and Byron,
2015). Third, compared to men, women are more risk averse in decision making, exhibit less
overconfidence (Sunden and Surette, 1998), apply stricter ethical standards (Pan and Sparks,
2012) and are more likely to challenge questionable business practices (Franke et al., 1997).
Finally, female directors embrace their fiduciary responsibility more strongly than males, as
shown by their higher propensity to serve on board monitoring committees such as audit
and nominating committees (Adams and Ferreira, 2009; Zhu et al., 2010). Consistently,
empirical evidence suggests that more gender-diversified boards are associated with higher
financial reporting quality (Srinidhi et al., 2011) and more transparent non-financial
disclosure, such as disclosure of CSR (Bear et al., 2010; Ibrahim and Angelidis, 1994) and
environmental risk (Rao et al., 2012; Liao et al., 2015).
This study examines whether a gender-diversified board is associated with more
transparent CPD. The focus is on gender diversity for two reasons. First, stakeholder
theory suggests that more diversified boards enhance the multi-accountability of
management to various stakeholder groups with divergent interests. Second, prior studies
of the association between board gender diversity and corporate performance have
produced mixed results (Post and Byron, 2015). Specifically, some studies find
that board gender diversity adds value (e.g. higher return on assets) (Singh et al., 2001;
ARA Nguyen and Faff, 2012), whereas other studies show that board gender diversity
decreases firm performance (e.g. accounting returns or an overall loss of value for
stockholders) (Bøhren and Strøm, 2010; Minguez-Vera and Martin, 2011). Several studies
conclude that female board representation is unrelated to firm performance (Carter et al.,
2010). Accordingly, the effect of gender diversity on general board effectiveness,
specifically on greater CPD transparency, remains an open question.
2.2 Corporate political disclosure

Businesses operate in complicated political environments. Governments can affect a firm’s
value through tax reforms or by enacting and enforcing investment and competition
regulations (Hansen et al., 2005). Firms have strong incentives to use their political spending
to establish or strengthen political connections that may help them to gain advantageous
competitive positions (e.g. government procurement contracts or tax incentives) (Goldman

et al., 2009, 2013) or to receive preferential debt financing terms (Faccio et al., 2006; Duchin
and Sosyura, 2012). Consistently, empirical evidence shows that a firm’s equity value rises
( falls) with the establishment (termination) of political connections (Fisman, 2001). CPD
communicates sensitive and value-relevant information about a corporation’s political
investments and can potentially expose the corporation to public scrutiny and affect its
information risk, reputation cost and litigation risk (Verrecchia, 1983; Li et al., 1997;
Clarkson et al., 2008; Porter, 2015). Currently, there are no formal rules governing CPD.
A select review of firms’ websites and disclosures suggests that CPD practices vary greatly
among firms. Some firms provide transparency hubs that have key CPD information
prominently displayed; others bury information deep in their websites (e.g. many clicks
from the home page).
In recent years, shareholder activist groups, advocacy groups and elected officials have
exerted political pressure on companies to adopt comprehensive CPD policies, including full
disclosure of their political donations. In 2015, 44 Democratic Senators wrote a letter to SEC
Chairwoman Mary Jo White, encouraging her to take action on disclosure rules for corporate
political contributions. Ms White was unable to address this issue due to a regulatory
restriction contained in a 2015 federal spending bill that did not allow the SEC to “finalize,
issue or implement” a rule on the disclosure of political contributions or contributions to
trade associations and other tax-exempt organizations through the fiscal year 2016. That
restriction, however, lapsed at the end of fiscal year 2016, and the new chairman, Jay
Clayton, is now free to tackle the issue of disclosure rules. In addition, numerous other House
and Senate bills, including H.R.430 and S.229: Disclosure 2015 Act, prescribing disclosure
requirements for corporations, labor organizations and certain other entities such as
political committees with accounts established for the purpose of accepting donations or
contributions that do not comply with the contribution limits or source prohibitions under
the Federal Election Campaign Act (but only with respect to such accounts), are circulating
in various subcommittees. Moreover, the CPA (2011–2015), an advocacy group in
Washington, DC, has been pushing for the full disclosure of political spending since 2003.
Since it began championing full disclosure, it has reached disclosure agreements with 145
companies in the S&P 500-stock index.
Given this institutional background, it is imperative to examine the determinants of
CPD and understand whether and how corporate governance can contribute to enhancing
CPD transparency. Unlike prior studies that examine the association between board
gender diversity and firm performance, this study focuses on the association between
board gender diversity and CPD transparency, a voluntary disclosure decision directly
influenced by board members. Given the voluntary nature of this decision, it is possible to
directly examine the association between gender diversity and the effectiveness of the
corporate board.
2.3 Stakeholder theory and hypothesis development Board gender
A company’s political contributions involve complex decisions and have consequences that diversity
may affect the broader objectives of each stakeholder group in distinct ways. Some
stakeholders may focus on the impact of a political contribution on financial returns,
whereas others may be more concerned with the impacts of the political contribution on a
firm’s reputation cost, proprietary cost, political cost or even litigation risk. Therefore,
a company’s decision to make and/or disclose a political contribution may represent a
compromise between the conflicting demands of various stakeholders with broad and
different objectives.
Stakeholder theory recognizes the multi-accountability of management to stakeholders with
divergent interests (Gray et al., 1996; Liao et al., 2015), making it particularly relevant to the study
of corporate political contributions and related disclosures, as such contributions are likely to be
supported by some stakeholders while being opposed by other stakeholders. According to

stakeholder theory, an effective board needs to be sufficiently representative to address the
concerns of a variety of stakeholders. In general, a more diversified board (e.g. one with more
female directors) is likely to provide better corporate governance because it possesses a broader
range of experiences and opinions (Singh et al., 2001; Huse and Grethe Solberg, 2006; Rose, 2007;
Terjesen et al., 2009; Loyd et al., 2013; Post and Byron, 2015) that better represent various
inherently discrete interest groups (Wang and Dewhirst, 1992).
According to stakeholder theory, corporate governance mechanisms must be responsive
to the needs of a wide range of stakeholders. One of their functions is to enhance the
transparency of corporate disclosure ( financial and non-financial) in order to hold
management accountable (e.g. Adams et al., 2010; Fama, 1980). Stakeholder theory suggests
that better governance means that boards are more representative of the broad interests of
various stakeholders and are more responsive to their needs (such as information needs).
Following this line of reasoning, the argument presented in this study is that greater gender
diversity, measured by the percentage of female directors on a board, increases board
effectiveness by enhancing the transparency of political contribution disclosure. The
hypothesis stated in alternative form is as follows:
H1. All else being equal, boards with greater gender diversity are associated with more
transparent political contribution disclosure.
3. Research design and sample selection

3.1 Measures of CPD transparency and policy transparency
Using the CPA–Zicklin Index, a unique data set created by a joint initiative of the CPA and
the Carol and Lawrence Zicklin Center for Business Ethics Research of the Wharton School
of the University of Pennsylvania (CPA, 2011–2015), this study constructs two measures of
CPD transparency for S&P 500 companies: a disclosure score and a policy score[4]. The
disclosure score (CPD TRANSPARENCY) measures the level of transparency in a
corporation’s voluntary corporate disclosure; specifically, it considers the amount of
political contributions and the identity of the recipients as well as the titles and names of the
executives who authorize the political spending. The disclosure of such information not only
makes corporate political activities more transparent, but it also holds management
accountable for their corporate political contribution decisions. The disclosure score is
assigned based on the nine scoring items given below. The items with higher potential
scores are deemed to be key performance indicators by the CPA–Zicklin scoring advisory
committee (i.e. scholars and professionals with expertise in corporate governance and
disclosure). All of the weighting factors are independently determined by the Institute.
Using scores produced by this secondary data provider maintains the objectivity of the CPD
scoring system. Each firm’s raw CPD score is summed over the nine scoring items and
ARA divided by the 36 total possible points to derive the percentage score CPD
TRANSPARENCY. Higher percentages indicate greater transparency in the disclosure of
corporate political contributions (Table I).
The policy score (POLICY TRANSPARENCY) measures the level of transparency in the
voluntary disclosures of the policies governing corporate political spending. Such
disclosures ensure that corporate political spending is consistent with a company’s public
policy position, and that it advances the long-term interests of the company rather than
expressing an individual manager’s personal preference. Each firm’s raw policy score is
summed over the six scoring items below and divided by the 16 total possible points to
derive the percentage score POLICY TRANSPARENCY. Higher percentages indicate
greater transparency in the corporate disclosure of policies governing political
contributions (Table II).
MAX (36)
D1: does the company publicly disclose corporate contributions to political candidates, parties and
committees, including recipient names and amounts given? 4
D2: does the company publicly disclose payments to 527 groups, such as governors associations
and super PACs, including recipient names and amounts given? 4
D3: does the company publicly disclose independent political expenditures made in direct support
of or opposition to a campaign, including recipient names and amounts given? 4
D4: does the company publicly disclose payments to trade associations that the recipient
organization may use for political purposes? 6
D5: does the company publicly disclose payments to other tax-exempt organizations that the
recipient may use for political purposes? 6
D6: does the company publicly disclose a list of the amounts and recipients of payments made by
trade associations or other tax-exempt organizations of which the company is either a
member or donor? 2
D7: does the company publicly disclose payments made to influence the outcome of ballot
measures, including recipient names and amounts given? 4
D8: does the company publicly disclose the company’s senior managers (by position/title of the
Table I. individuals involved) who have final authority over the company’s political spending decisions? 2
Coding scheme for D9: does the company publicly disclose an archive of each political expenditure report, including
disclosure score (CPD all direct and indirect contributions, for each year since the company began disclosing the
TRANSPARENCY ) information (or at least for the past five years)? 4
MAX (16)
P1: does the company disclose a detailed policy governing its political expenditures from
corporate funds? 6
P2: does the company have a publicly available policy stating that all of its contributions will
promote the interests of the company and will be made without regard for the private political
preferences of executives? 2
P3: does the company publicly describe the types of entities considered to be proper recipients of
the company’s political spending? 2
P4: does the company publicly describe the public policy positions that become the basis for its
spending decisions with corporate funds? 2
Table II. P5: does the company have a public policy requiring senior managers to oversee and have final
Coding scheme for authority over all of the company’s political spending? 2
policy score (POLICY P6: does the company have a publicly available policy that the board of directors regularly
TRANSPARENCY ) oversees the company’s corporate political activity? 2
3.2 Empirical model Board gender
To test the hypothesis, models of the determinants of the transparency of political diversity
contribution disclosure are constructed based on a framework developed by Hyun et al.
(2014). This framework suggests that transparency in voluntary non-financial disclosure
depends on corporate governance, proprietary cost and political cost. The following
ordinary least squares (OLS) regression model is estimated on this study’s pooled data to
test the predictions specified in H1:
CPD TRAN SPAREN CY it ¼ b0 þb1 GEN DERit þb2 GOV ERN AN CE þb3 DI RI N DEP
þb4 BDSI Z E þb5 LMV it þb6 LEV it þb7 TOBI N SQit
þb8 ROAit þb9 AN ALY ST it þb10 I N STI TOW N it
þb11 R&DTA þI ndustry Fixed Ef f ects

þY ear Fixed Ef f ectsþ eit ; (1)
POLI CY TRAN SPAREN CY it ¼ b0 þ b1 GEN DERit þb2 GOV ERN AN CE

þ b3 DI RI N DEP þ b4 BDSIZ E þb5 LM V it
þ b6 LEV it þ b7 TOBI N SQit þ b8 ROAit
þ b9 AN ALY ST it þ b10 I N STI TOW N it þb11 R&DTA
þ Industry Fixed Ef f ectsþ Y ear Fixed Ef f ectsþ eit ; (2)
where GENDER is the variable of interest defined as the percentage of women on the
board of directors; GOVERNANCE captures the overall corporate governance quality of
the firm according to Bloomberg; DIRINDEP captures the percentage of independent
board members according to Bloomberg; and BDSIZE captures the size of the board of
directors according to Bloomberg. Including these three main control variables absorbs
the effect of other corporate governance mechanisms on CPD disclosure, allowing the
model to capture the impact of gender diversity on CPD transparency that is incremental
to the other general governance mechanisms. Industry Fixed Effects is a variable based on
Fama and French’s 48-factor industry model; Year Fixed Effects represents the year fixed
effects for the company’s fiscal year end; and i and t represent company and fiscal
year-end indicators, respectively[5].
3.2.1 Measures of proprietary cost. Verrecchia (1983) notes that a key friction in the
partial disclosure equilibrium is the proprietary costs associated with being forthcoming.
In this study’s setting, proprietary costs are related to the disclosure of sensitive
information, i.e., political contributions, which increases the probability of criticism,
scrutiny, sanctions or attack (Clarkson et al., 2008; Li et al., 1997). Following Clarkson et al.
(2008), it is assumed that a firm’s industry can serve as a measure of the firm’s proprietary
costs. To control for proprietary costs and other unidentified factors that might vary by
industry, industry fixed effects are controlled for in the model[6]. No directional
predictions are made for the industry dummies. Moreover, consistent with Wang (2007),
who argues that the ratio of research and development expenses to total assets is
positively related to proprietary costs, this study includes a direct firm-level variable,
RDT&A, which is measured as research and development expenses as a percentage of
total assets, as a proxy for proprietary costs.
3.2.2 Measures of political cost. Prior studies have emphasized the role of political
considerations in management reporting choices (Watts and Zimmerman, 1978, 1986).
Firms may employ several approaches to reduce the likelihood that a disclosure will incur
adverse political consequences and increased costs to the firm (Watts and Zimmerman, 1986).
ARA In the context of this study, the argument is that firms are likely to be concerned about
regulatory sanctions and scrutiny by the firm’s stakeholders and the media (Healy and
Palepu, 2001; Lo, 2003). Concerns about such political costs can induce firms to avoid
transparent disclosure of their political contributions.
Following Eng and Mak (2003) and Hyun et al. (2014), this study controls for the effects of
firm visibility, operational performance and leverage on political costs. First, it is noted that
larger firms are likely to draw greater attention from stakeholders, and this motivates them
to be more transparent. For example, Robinson et al. (2011) show that SEC reviews of firm
compliance with disclosure rules have focused on large firms. To proxy for the political
costs associated with visibility, firm size is used to capture the regulatory sanctions and
public scrutiny triggered by firm visibility (Bannister and Newman, 2003; Gong et al., 2011).
The natural logarithm of the market value of equity is used to measure firm size (SIZE) and
a positive sign is predicted for this variable.

Second, following Hyun et al. (2014), it can be argued that poorly performing firms
reduce the disclosure transparency of political contributions to avoid being criticized for
improper use of corporate resources. In this study, operational performance is measured
by return on assets (ROA), and a positive sign is predicted for this variable. Third,
leverage is measured by the book value of total liabilities divided by the book value of
total assets (LEV ). The impact of leverage on disclosure transparency is not clear ex ante.
On the one hand, firms with higher leverage may have an incentive to lower disclosure
transparency to avoid scrutiny by the provider of debt capital (Hyun et al., 2014). On the
other hand, the provider of debt capital may demand more information to monitor
management’s behavior, which suggests that highly leveraged firms may be more
forthcoming in their disclosure in order to facilitate the contracting demand for
information and to lower the cost of debt (Leftwich et al., 1981; DeBoskey et al., 2017).
Given the mixed evidence of the association between leverage and disclosure in prior
studies, no directional prediction is made for this variable.
3.2.3 Other control variables. A number of control variables that have been found to be
important determinants of other types of disclosure transparency are considered
in this study[7]. Specifically, in addition to the above proxies for corporate
governance, proprietary costs and political costs, the following variables are controlled
for: Tobin’s Q (TOBINSQ), number of analysts following a firm (ANALYST) and
institutional ownership (INSTITOWN).
First, following Peters and Romi (2014), the growth opportunities of firms are
controlled for with the variable TOBINSQ. On the one hand, growing firms have fewer
discretionary resources with which to make political contributions, decreasing the
likelihood and motivation for disclosure. On the other hand, growing firms face a greater
amount of information asymmetry, which increases the demand for more transparent
disclosure. Therefore, no directional prediction is made for TOBINSQ. Second, the study
controls for the number of analysts following a firm (ANALYST). Irani and Oesch (2013)
find that higher analyst coverage leads to demands for more transparency in corporate
disclosure; therefore, a positive sign is predicted for ANALYST. Finally, the study
controls for institutional ownership (INSTITOWN); the prediction is that, due to their
substantial investment, institutional shareholders have a strong incentive to promote
more transparent disclosure (Karamanou and Vafeas, 2005; Peters and Romi, 2014;
Shleifer and Vishny, 1986).
3.2.4 Model specification. An OLS regression with robust standard errors is used to
analyze the pooled data due to the inter-temporal stickiness of several of the corporate
governance variables. The sample consists of S&P 500 firms, which are mature firms with
stronger than average corporate governance systems; thus, there is a limited change year to
year on such items as the size of the board, number of analysts and several of the control Board gender
variables. Furthermore, the sample is unbalanced and includes single-year observations for diversity
some firms, as the CPA (2011–2015) does not cover the entire S&P 500 throughout the
sample period[8].
It is generally understood that including firms with only one year of data and
slow-changing predictors in a sample can complicate an analysis, as this condition obscures
the identification of heterogeneity in individual firm-year observations (Torres-Reyna, 2007).
The econometric research on pooled data warns against the use of fixed effects models in
this environment (Baltagi, 2008; Torres-Reyna, 2007). Therefore, in this study, the OLS
empirical model is estimated with industry and year fixed effects, and clustered standard
errors are used at the company level. This robust regression allows correlations within
companies but not across companies (by clustering) and accounts for any company level
variable not included in the model. It also captures temporal trends over the sample period.
Equations (1) and (2) are estimated using OLS regression, and the robust standard errors are
clustered at the company level (Petersen, 2009).
3.3 Sample selection

The sample period is from 2011 to 2015. The CPA–Zicklin Index contains data for the top
100 firms in the S&P 500 index for 2011, the top 200 firms in 2012 and 2013, the top 300
firms in 2014 and the entire S&P 500 index in 2015. The sample for the whole period
contains 1,300 firm-year observations. After removing firms dropped from the S&P index,
firms with missing accounting variables and firms not covered by CPA’s (2011–2015)
annual surveys, the final sample contains 1,013 firm-year observations. Panel A of Table III
contains the tabulated yearly reconciliation of the entire cross-sectional time series sample.
Panel B presents the coverage rate of the S&P 500 firms over the entire pooled sample for
the 2011–2015 period. The pooled sample includes 456 firm clusters of the 500 firms,
representing approximately 78 percent of the original sample.
The corporate governance proxies (gender diversity (GENDER), general corporate
governance quality (GOVERNANCE) and board size [BOARDSIZE]) and the six firm-level
variables (SIZE, LEV, TOBINSQ, ROA, ANALYST and INSTITOWN) are drawn from
Bloomberg, which is one of the largest and most successful financial data service firms in
the world. It is regularly used by financial experts, investors and other financial
Panel A: sample
2011 2012 2013 2014 2015 Total
Total coverage CPA–Zicklin (2011–2015) 100 200 200 300 500 1,300
Less: firms dropped from the S&P 500 index (3) (9) (13) (17) (48) (90)
Firms missing accounting variables (2) (27) (37) (39) (53) (158)
Firms not covered by CPA–Zicklin (6) (8) (8) (10) (7) (39)
Number of observations used in the main 89 156 142 234 392 1,013
regression estimations
Panel B: sample coverage
Year Total CPA– Current study Coverage
Zicklin firms coverage rate (%)
2011 100 89 89
2012 200 156 78
2013 200 142 71
2014 300 234 78
2015 500 392 78 Table III.
Total 1,300 1,013 78 Sample selection
ARA intermediaries to conduct investment and portfolio allocation decisions. Bloomberg does not
use any mathematical models to derive any of their data points. Rather, all of the data points
are transparent and directly linked to company source documents. Using Bloomberg makes
it possible to find up-to-date matching corporate governance and firm-level variables for the
1,013 firm-year observations in the sample. The proprietary cost firm-level proxy variable
(R&DTA) is drawn from Compustat. The tickers are first matched with the CPA
(2011–2015) for the most recent year, 2015. Then these tickers are used to identify the
corporate governance and accounting control variables for each fiscal year for the
2011–2015 period in the Bloomberg S&P 500 product index and Compustat data set.
4. Results and discussion

4.1 Descriptive statistics
As shown in Table IV, the mean scores for CPD TRANSPARENCY and POLICY
TRANSPARENCY are 38.29 and 62.29 percent, respectively. The minimum is 0, and the
maximum is 100 percent for both dependent variables, indicating a large variance across the
sample firms. This offers potential support for standardizing these two measures of CPD
transparency. Among the main corporate governance variables, GENDER has a mean score
of 19.28 percent, with a minimum of 0 and a maximum of 50 percent, indicating that, on
average, approximately one in five board members are women. GOVERNANCE has a mean
score of 58.50 percent, with a minimum of 32.14 and a maximum of 85.71 percent,
DIRINDEP has a mean score of 88.86 percent, with a minimum of 62.50 and a maximum of
100 percent and BOARDSIZE has a mean score of 11.48 members, with a minimum of 5 and
a maximum of 30 members. Other control variables are consistent with our expectations for
a sample of large S&P 500 firms.
4.2 Correlation matrix

Table V presents the Pearson correlation coefficients for the variables specified in Equations
(1) and (2). The significant correlation coefficients ( p o0.05) are starred. The correlations
between GENDER and CPD TRANSPARENCY and between GENDER and POLICY
TRANSPARENCY are significantly positive, with correlation coefficients of 0.222 and
0.190, respectively. In addition, the correlations between disclosure transparency (CPD
TRANSPARENCY and POLICY TRANSPARENCY) and SIZE, LEV, ANALYST and
INSTITOWN are significantly positive, ranging from 0.15 to 0.38. These associations
suggest that larger, more indebted firms with greater analyst followings earn higher CPD
Variable Min. Max. Mean Median SD Skewness Kurtosis
CPD TRANSPARENCY 0 100 38.293 33.333 33.416 0.304 1.635

POLICY TRANSPARENCY 0 100 62.294 75 34.203 −0.502 1.791
GENDER 0 50 19.280 18.182 8.301 0.460 3.561
GOVERNANCE 32.143 85.714 58.495 57.143 7.082 0.652 3.443
DIRINDEP 62.500 100 88.860 90.919 4.914 −1.602 6.251
BOARDSIZE 5 30 11.475 11 2.261 1.452 1.118
SIZE 7.423 13.391 10.359 10.26 0.95 0.343 3.154
LEV 0.032 1.715 0.63 0.625 0.208 0.397 2.675
TOBINSQ 0.621 13.027 2.116 1.721 1.345 2.770 2.377
ROA −61.820 42.279 6.689 5.937 7.594 −1.317 1.798
ANALYST (number) 1 61 24.857 24 8.225 0.563 3.918
INSTITOWN 10 99 68.58 81 30.932 −1.13 2.696
Table IV. R&DTA 0 0.400 0.019 0 0.039 3.774 2.473
Descriptive statistics Note: The variables included in this table are described in Table AI
Variable VIF (1) (2) (3) (4) (5) (6) (7) (8) (9)
1. CPD TRANSPARENCY na 1
2. POLICY TRANSPARENCY na 0.748* 1
3. GENDER 1.38 0.222* 0.190* 1
4. GOVERNANCE 1.62 0.273* 0.277* 0.122* 1
5. DIRINDEP 1.35 0.185* 0.223* 0.089* 0.208* 1
6. BOARDSIZE 1.42 0.150* 0.122* 0.021 0.184* 0.250* 1
7. SIZE 2.06 0.371* 0.375* 0.147* 0.342* 0.090* 0.246* 1
8. LEV 1.74 0.154* 0.175* 0.116* 0.067* 0.249* 0.224* −0.037 1
9. TOBINSQ 2.76 −0.054 −0.104* 0.049 −0.200* −0.224* −0.234* 0.114* −0.180* 1
10. ROA 1.9 −0.014 −0.057* 0.064* −0.069* −0.186* −0.136* 0.206* −0.251* 0.491*
11. ANALYST 2.25 0.199* 0.164* 0.008 0.108* 0.003 0.004 0.440* −0.174* 0.056
12. INSTITOWN 1.22 0.167* 0.198* 0.085* 0.123* 0.118* 0.086* 0.185* 0.049 −0.086*
13. R&DTA 2.77 0.072* 0.003 0.035 0.037 −0.026 −0.113* 0.176* −0.202* 0.463*
VIF (10) (11) (12) (13)
1. CPD TRANSPARENCY na
2. POLICY TRANSPARENCY na
3. GENDER 1.38
4. GOVERNANCE 1.62
5. DIRINDEP 1.35
6. BOARDSIZE 1.42
7. SIZE 2.06
8. LEV 1.74
9. TOBINSQ 2.76
10. ROA 1.9 1
11. ANALYST 2.25 0.004 1
12. INSTITOWN 1.22 0.050 0.054 1
13. R&DTA 2.77 0.119* 0.173* −0.015 1
Notes: The table presents the results of the VIF test and the correlation coefficient matrix. The variables included in this table are described in Table AI. The VIFs are
based on the estimation given in Table VII. *Significant at the 0.05 level
diversity
Board gender
Table V.
Pearson correlations
ARA disclosure scores. Moreover, by squaring the correlation coefficients (i.e. coefficient of
determinants), it is possible to examine the impact that each control variable, taken on its
own, has on CPD transparency. The results reveal that 7 percent of a firm’s CPD transparency
is directly related to its overall corporate governance quality (GOVERNANCE; ρ ¼ 0.273) and
3 percent of a firm’s CPD transparency is directly related to the independence of its board of
directors (DIRINDEP; ρ ¼ 0.185). The results for the main test variable, GENDER (ρ ¼ 0.222),
reveal that 5 percent of a firm’s CPD transparency is directly related to the gender diversity of
its board. The analysis of the firm-level control variables reveals that 14 percent of a firm’s
CPD transparency is directly related to the size of the firm (SIZE; ρ ¼ 0.371). These univariate
correlation coefficient results are consistent with the multivariate tests in the main models
given in Equations (1) and (2).
4.3 Univariate means difference test

Table VI (Panel A) presents the results of the mean difference tests of CPD
TRANSPARENCY and POLICY TRANSPARENCY in two subsamples: firms where the
main test variable, GENDER, is higher than the median and firms where it is lower than the
median. The results are fully consistent with the hypotheses and indicate that CPD
TRANSPARENCY and POLICY TRANSPARENCY are 14–15 percent points higher in the
subsample with high gender diversity than in the subsample with low gender diversity.
Table VI (Panel B) presents the results of the mean difference tests of CPD
TRANSPARENCY and POLICY TRANSPARENCY when the full sample is partitioned
into subsamples based on each of the general governance measures (GOVERNANCE,
DIRINDEP and BOARDSIZE) and the other control variables. The results show that CPD
TRANSPARENCY and POLICY TRANSPARENCY are greater for larger companies that
have better overall governance effectiveness, larger and more independent boards, are more
leveraged, have higher proprietary cost (R&DTA) and are followed by more analysts.
4.4 Multivariate regression analyses

Tables VII and VIII present the multivariate results of estimating Equations (1) and (2),
regressing GENDER on the two dependent variables (CPD TRANSPARENCY and POLICY
TRANSPARENCY). The positive coefficients on GENDER ( p o0.01) in both regressions
suggest that higher gender diversity (i.e. a higher percentage of female directors) is
associated with greater CPD TRANSPARENCY and POLICY TRANSPARENCY,
supporting H1. These results are consistent with previous findings that female directors
are associated with more transparent non-financial disclosure (see Ibrahim and Angelidis,
1994; Bear et al., 2010; Rao et al., 2012; Liao et al., 2015). The coefficient on GENDER is still
significant after controlling for the coefficient on GOVERNANCE ( p o0.01), a proxy for
general governance quality. The positive coefficient on DIRINDEP ( p o0.10) indicates that
CPD transparency increases with board independence. There is no significant relationship
with BOARDSIZE in any of the OLS estimations. The examination of the firm-level control
variables finds significant coefficients for SIZE, TOBINSQ, ANALYST ( p o0.01), LEV
( po 0.05) and INSTITOWN ( p o0.10). The signs on these control variables are consistent
with prior studies (Hyun et al., 2014). These results demonstrate that the proposed test
models are consistent with the Hyun et al. framework and indicate that CPD
TRANSPARENCY and POLICY TRANSPARENCY are affected by the same factors as
other non-financial disclosure variables such as CSR and environmental disclosure.
4.5 Sensitivity tests

Three sensitivity tests are used to test the robustness of the empirical results. They are not
tabulated for the sake of brevity. First, the regressions are re-run after excluding the initial
Panel A: univariate analysis of the test variable (GENDER)
Board gender
Mean Mean Mean difference diversity
(1) (0) (1)–(0) t-value p-value
GENDER: H1
CPD TRANSPARENCY 45.026 30.403 14.624 7.659 0.000***
POLICY TRANSPARENCY 68.745 54.735 14.01 7.146 0.000***
Panel B: univariate analysis of corporate governance and firm-specific characteristics
Mean Mean Mean difference
(1) (0) (1)−(0) t-value p-value
Governance controls
GOVERNANCE

DIRINDEP
BOARDSIZE
Firm-level controls
SIZE
LEV
TOBINSQ
CPD TRANSPARENCY 38.689 37.896 0.793 0.407 0.684
POLICY TRANSPARENCY 60.403 64.188 −3.784 1.899 0.058
ROA
CPD TRANSPARENCY 38.158 38.428 −0.271 0.139 0.89
POLICY TRANSPARENCY 60.738 63.848 −3.11 1.559 0.119
ANALYST
INSTITOWN
CPD TRANSPARENCY 38.849 37.742 1.108 0.568 0.57
POLICY TRANSPARENCY 64.111 60.492 3.619 1.815 0.07
R&DTA
Notes: The variables included in table are defined in Table AI. A t-test is used to test the differences within
the sample means. Mean difference tests of the CPD TRANSPARENCY and POLICY TRANSPARENCY in
the subsamples with an above-the-median percentage of women directors and a below-the-median percentage Table VI.
of women directors are also conducted. 1(0) indicates the subsample of firms above (below) the median. Univariate means
***Significant at the 0.0001 level difference test
year of the CPA (2011–2015), as the index coverage for that year is based on the S&P 100
Index and not the S&P 500 Index. Second, to control for outliers, the regressions are re-run
using a balanced sample that only includes firms that have been covered by the CPA
Zickling database for at least three years. Finally, the regressions are re-run with log
ARA Variable Predicted sign Coefficient (robust and clustered t-statistic)
GENDER (H1) + 0.465*** (2.981)

GOVERNANCE + 0.558** (2.577)
DIRINDEP + 0.444* (1.712)
BOARDSIZE ? −0.355 (−0.617)
SIZE + 9.113*** (5.173)
LEV ? 15.113** (2.036)
TOBINSQ ? −3.126*** (−2.917)
ROA + 0.069 (0.410)
ANALYST + 0.845*** (4.261)
INSTITOWN + 0.055 (1.473)
R&DTA ? −18.674 (−0.408)
Constant −147.400*** (−4.889)

Year fixed effects Yes
Fama–French industry Yes
Cluster by firm Yes
Table VII. 2
Determinants of the Adjusted R 0.344
transparency of Notes: The table presents the multivariate regression results of the association between gender diversity and
corporate political CPD transparency. The dependent variable is CPD TRANSPARENCY. Definitions of all of the variables are
disclosure provided in Table AI. *,**,***Significant at the 0.10, 0.05 and 0.01 levels, respectively, using two-tailed tests
Variable Predicted sign p-value (robust and clustered t-statistic)
GENDER (H1) + 0.425*** (2.931)

GOVERNANCE + 0.529*** (2.671)
DIRINDEP + 0.745*** (2.654)
BOARDSIZE ? −0.900 (−1.581)
SIZE + 11.241*** (6.396)
LEV ? 15.775** (2.122)
TOBINSQ ? −2.392 (−2.031)
ROA + −0.169 (−0.907)
ANALYST + 0.714*** (2.986)
INSTITOWN + 0.078* (1.897)
R&DTA ? −77.875 (−1.185)
Constant −155.022*** (−4.949)
Year fixed effects Yes
Fama–French industry Yes
Cluster by firm Yes
Adjusted R2 0.362
Table VIII. Notes: The table presents the multivariate regression results of the association between gender diversity and
Determinants of policy transparency. The dependent variable is POLICY TRANSPARENCY. Definitions of all of the variables
policy transparency are provided in Table AI. *,**,***Significant at the 0.10, 0.05 and 0.01 levels, respectively, using two-tailed tests
transformed independent and dependent variables (where possible, indicated by the use of a
graphical normality test). In all three cases, the results are qualitatively similar. In general,
the results are robust to these alternative model specifications.
5. Conclusions, limitations and future research

This study examines the impact of corporate board gender diversity on CPD transparency,
an unexplored topic in the literature on the association between corporate governance
mechanisms and voluntary disclosure. This study answers the call to investigate the effects
of corporate governance on alternative forms of corporate reporting and attempts to Board gender
disentangle the mixed results of previous studies on the effectiveness of gender-diversified diversity
boards (Post and Byron, 2015). Using a pooled sample of 456 S&P 500 companies from the
2011 to 2015 period, the study finds that a more diversified board is an important internal
corporate governance mechanism for enhancing CPD transparency. The study contributes
to the literature by using a novel measure of the transparency of boards’ policy making
processes. Unlike prior studies that investigate the effect of diversified boards on corporate
value, this study directly tests the effect of a diversified board on direct decision
(i.e. corporate disclosure). The results shed light on the mechanism through which a
diversified board contributes to general corporate governance.
One important caveat is that this study ignores the impact of the materiality of political
contributions (e.g. percentage of annual political contribution over net income), as such data
are not publicly available. However, including the amount of the political contributions in
the regression model introduces potentially severe endogeneity issues, as both the level of
transparency and the amount of the political contribution are self-selected by the firms.
Nevertheless, the level of transparency in political contributions serves as a proxy for
boards’ effectiveness and is suitable for this study’s focus on the impact of gender diversity
on board effectiveness.
Notes
1. For example, in March 2015, the New York State Common Retirement fund, which owned
over $20m worth of US Steel stock, forced the corporation to disclose its political contributions
(Porter, 2015).
2. See, for example, studies of the impact of corporate governance on voluntary financial and non-
financial disclosures (Eng and Mak, 2003), management forecasts (Karamanou and Vafeas, 2005),
executive compensation disclosure (Laksmana, 2008), CSR disclosure (Bebbington et al., 2008;
Chan et al., 2014; Cheng and Courtenay, 2006; Cowen et al., 1987; Jizi et al., 2014) and environmental
risk disclosure (Gibson and O’Donovan, 2007; Rao et al., 2012; Liao et al., 2015; Mallin et al., 2013;
Peters and Romi, 2014).
3. Erhardt et al. (2003) document a positive association between board gender diversity and firm
performance. Bøhren and Strøm (2010) and Minguez-Vera and Martin (2011) find that firms with
more female directors experience lower accounting returns. Chapple and Humphrey (2014) find no
evidence of an association between gender diversity and performance.
4. The index was first published in 2011 and initially covered the S&P 100 Index (measured by
market capitalization at the end of the year). The 2012–2013 indexes cover the top 200 firms in the
S&P 500 Index. The 2014 index covers the top 300 firms in the S&P 500 Index. From 2015,
the index covers the entire S&P 500 Index.
5. When the model is run using Fama and French’s 12-factor industries, the results are qualitatively
similar.
6. Similarly, some studies of voluntary disclosure (e.g. Donnelly and Mulcahy, 2008; Harris, 1998;
Peters and Romi, 2014; Robinson et al., 2011) control for proprietary costs using the Herfinndahl
index. The results of this study remain robust if the industry effect is replaced with the
Herfinndahl index.
7. Following Peters and Romi (2014), it is acknowledged that the selection of control variables in this
study is not exhaustive of the variables addressed in the vast body of disclosure literature. As this
study is not tied to replicating a specific study’s design choices, the direct comparison with
previous studies is limited, and therefore it is not necessary to be exhaustive.
8. The empirical tests are not sensitive to these sample size differences. Numerous robustness checks
show that the empirical results are qualitatively similar. These robustness checks are discussed in
the sensitivity tests section.
ARA References
Adams, R.B. and Ferreira, D. (2009), “Women in the boardroom and their impact on governance and
performance”, Journal of Financial Economics, Vol. 94 No. 2, pp. 291-309.
Adams, R.B., Hermalin, B.E. and Weisbach, M.S. (2010), “The role of boards of directors in corporate
governance: a conceptual framework and survey”, Journal of Economic Literature, Vol. 48 No. 1,
pp. 58-107.
Baltagi, B. (2008), Econometric Analysis of Panel Data, John Wiley & Sons, Hoboken, NJ.
Bannister, J.W. and Newman, H.A. (2003), “Analysis of corporate disclosures on relative performance
evaluation”, Accounting Horizons, Vol. 17 No. 3, pp. 235-246.
Barako, D.G., Hancock, P. and Izan, H.Y. (2006), “Factors influencing voluntary corporate disclosure
by Kenyan companies”, Corporate Governance: An International Review, Vol. 14 No. 2,
pp. 107-125.
Bear, S., Rahman, N. and Post, C. (2010), “The impact of board diversity and gender composition on
corporate social responsibility and firm reputation”, Journal of Business Ethics, Vol. 97 No. 2,
pp. 207-221.
Bebbington, J., Larrinaga, C. and Moneva, J.M. (2008), “Corporate social reporting and reputation risk
management”, Accounting, Auditing & Accountability Journal, Vol. 21 No. 3, pp. 337-361.
Bøhren, Ø. and Strøm, R.Ø. (2010), “Governance and politics: regulating independence and diversity in
the board room”, Journal of Business Finance & Accounting, Vol. 37 No. 9, pp. 1281-1308.
Branco, M.C. and Rodrigues, L.L. (2008), “Factors influencing social responsibility disclosure by
Portuguese companies”, Journal of Business Ethics, Vol. 83 No. 4, pp. 685-701.
Carcello, J.V. (2009), “Governance and the common good”, Journal of Business Ethics, Vol. 89 No. 1,
pp. 11-18.
Carter, D.A., Simkins, B.J. and Simpson, W.G. (2003), “Corporate governance, board diversity, and firm
value”, Financial Review, Vol. 38 No. 1, pp. 33-53.
Carter, D.A., D’Souza, F., Simkins, B.J. and Simpson, W.G. (2010), “The gender and ethnic diversity of
US boards and board committees and firm financial performance”, Corporate Governance: An
International Review, Vol. 18 No. 5, pp. 396-414.
Chan, M.C., Watson, J. and Woodliff, D. (2014), “Corporate governance quality and CSR disclosures”,
Journal of Business Ethics, Vol. 125 No. 1, pp. 59-73.
Chapple, L. and Humphrey, J.E. (2014), “Does board gender diversity have a financial impact? Evidence
using stock portfolio performance”, Journal of Business Ethics, Vol. 122 No. 4, pp. 709-723.
Cheng, E.C. and Courtenay, S.M. (2006), “Board composition, regulatory regime and voluntary
disclosure”, The International Journal of Accounting, Vol. 41 No. 3, pp. 262-289.
Clarkson, P.M., Li, Y., Richardson, G.D. and Vasvari, F.P. (2008), “Revisiting the relation between
environmental performance and environmental disclosure: an empirical analysis”, Accounting,
Organizations and Society, Vol. 33 No. 4, pp. 303-327.
Cowen, S.S., Ferreri, L.B. and Parker, L.D. (1987), “The impact of corporate characteristics on social
responsibility disclosure: a typology and frequency-based analysis”, Accounting, Organizations
and Society, Vol. 12 No. 2, pp. 111-122.
CPA (2011–2015), “CPA-Zicklin index of corporate political disclosure and accountability”, available at:
http://files.politicalaccountability.net/index/CPA-Zicklin_Index_Final_with_links.pdf (accessed
May 10, 2017).
DeBoskey, D., Li., Y., Lobo, G.J. and Luo, Y. (2017), “Transparency of corporate political disclosure and
the cost of debt”, working paper, San Diego State University, San Diego, CA.
Donnelly, R. and Mulcahy, M. (2008), “Board structure, ownership, and voluntary disclosure in Ireland”,
Corporate Governance: An International Review, Vol. 16 No. 5, pp. 416-429.
Duchin, R. and Sosyura, D. (2012), “The politics of government investment”, Journal of Financial
Economics, Vol. 106 No. 1, pp. 24-48.
Eng, L.L. and Mak, Y.T. (2003), “Corporate governance and voluntary disclosure”, Journal of Board gender
Accounting and Public Policy, Vol. 22 No. 4, pp. 325-345. diversity
Erhardt, N.L., Werbel, J.D. and Shrader, C.B. (2003), “Board of director diversity and firm financial
performance”, Corporate Governance: An International Review, Vol. 11 No. 2, pp. 102-111.
Faccio, M., Masulis, R.W. and McConnell, J. (2006), “Political connections and corporate bailouts”, The
Journal of Finance, Vol. 61 No. 6, pp. 2597-2635.
Fama, E.F. (1980), “Agency problems and the theory of the firm”, The Journal of Political Economy,
Vol. 88 No. 2, pp. 288-307.
Feingold, A. (1994), “Gender differences in personality: a meta-analysis”, Psychological Bulletin, Vol. 116
No. 3, pp. 429-456.
Fisman, R. (2001), “Estimating the value of political connections”, The American Economic Review,
Vol. 91 No. 4, pp. 1095-1102.

Franke, G.R., Crown, D.F. and Spake, D.F. (1997), “Gender differences in ethical perceptions of
business practices: a social role theory perspective”, Journal of Applied Psychology, Vol. 82 No. 6,
pp. 920-934.
Gibson, K. and O’Donovan, G. (2007), “Corporate governance and environmental reporting: an
Australian study”, Corporate Governance: An International Review, Vol. 15 No. 5, pp. 944-956.
Gold, M. (2015), “Will California guarantee the right to know the names of political donors?”,
Washington Post, September 16.
Goldman, E., Rocholl, J. and So, J. (2009), “Do politically connected boards affect firm value?”, Review of
Financial Studies, Vol. 22 No. 6, pp. 2331-2360.
Goldman, E., Rocholl, J. and So, J. (2013), “Politically connected boards of directors and the allocation of
procurement contracts”, Review of Finance, Vol. 17 No. 5, pp. 1617-1648.
Gong, G., Li, L.Y. and Shin, J.Y. (2011), “Relative performance evaluation and related peer groups in
executive compensation contracts”, The Accounting Review, Vol. 86 No. 3, pp. 1007-1043.
Gray, R., Owen, D. and Adams, C. (1996), Accounting & Accountability: Changes and Challenges in
Corporate Social and Environmental Reporting, Prentice Hall, Upper Saddle River, NJ.
Gul, F.A. and Leung, S. (2004), “Board leadership, outside directors’ expertise and voluntary corporate
disclosures”, Journal of Accounting and Public Policy, Vol. 23 No. 5, pp. 351-379.
Hansen, W.L., Mitchell, N.J. and Drope, J.M. (2005), “The logic of private and collective action”,
American Journal of Political Science, Vol. 49 No. 1, pp. 150-167.
Harris, M.S. (1998), “The association between competition and managers’ business segment reporting
decisions”, Journal of Accounting Research, Vol. 36 No. 1, pp. 111-128.
Healy, P.M. and Palepu, K.G. (2001), “Information asymmetry, corporate disclosure, and the capital
markets: a review of the empirical disclosure literature”, Journal of Accounting and Economics,
Vol. 31 No. 1, pp. 405-440.
Huse, M. and Grethe Solberg, A. (2006), “Gender-related boardroom dynamics: how Scandinavian
women make and can make contributions on corporate boards”, Women in Management Review,
Vol. 21 No. 2, pp. 113-130.
Hyun, J.H., Kim, B.J., Kwon, S. and Shin, J.Y. (2014), “The effects of corporate governance, competition,
and political costs on strategic executive pay disclosure: evidence from Korea”, Journal of
Management Accounting Research, Vol. 26 No. 2, pp. 195-220.
Ibrahim, N.A. and Angelidis, J.P. (1994), “Effect of board members’ gender on corporate social
responsiveness orientation”, Journal of Applied Business Research, Vol. 10 No. 1, pp. 35-40.
Irani, R.M. and Oesch, D. (2013), “Monitoring and corporate disclosure: evidence from a natural
experiment”, Journal of Financial Economics, Vol. 109 No. 2, pp. 398-418.
Jizi, M.I., Salama, A., Dixon, R. and Stratling, R. (2014), “Corporate governance and corporate social
responsibility disclosure: evidence from the US banking sector”, Journal of Business Ethics,
Vol. 125 No. 4, pp. 601-615.
ARA Karamanou, I. and Vafeas, N. (2005), “The association between corporate boards, audit committees, and
management earnings forecasts: an empirical analysis”, Journal of Accounting Research, Vol. 43
No. 3, pp. 453-486.
Laksmana, I. (2008), “Corporate board governance and voluntary disclosure of executive compensation
practices”, Contemporary Accounting Research, Vol. 25 No. 4, pp. 1147-1182.
Leftwich, R.W., Watts, R.L. and Zimmerman, J.L. (1981), “Voluntary corporate disclosure: the case of
interim reporting”, Journal of Accounting Research, Vol. 19 No. S1, pp. 50-77.
Li, Y., Richardson, G.D. and Thornton, D.B. (1997), “Corporate disclosure of environmental liability
information: theory and evidence”, Contemporary Accounting Research, Vol. 14 No. 3, pp. 435-474.
Liao, L., Luo, L. and Tang, Q. (2015), “Gender diversity, board independence, environmental committee
and greenhouse gas disclosure”, The British Accounting Review, Vol. 47 No. 4, pp. 409-424.
Lo, K. (2003), “Economic consequences of regulated changes in disclosure: the case of executive
compensation”, Journal of Accounting and Economics, Vol. 35 No. 3, pp. 285-314.

Loyd, D.L., Wang, C.S., Phillips, K.W. and Lount, R.B. Jr (2013), “Social category diversity promotes
premeeting elaboration: the role of relationship focus”, Organization Science, Vol. 24 No. 3,
pp. 757-772.
Mallin, C., Michelon, G. and Raggi, D. (2013), “Monitoring intensity and stakeholders’ orientation: how
does governance affect social and environmental disclosure?”, Journal of Business Ethics,
Vol. 114 No. 1, pp. 29-43.
Min, D. (2016), “Corporate political activity and non-shareholder agency costs”, Yale Journal on
Regulation, Vol. 33 No. 2, pp. 423-489.
Minguez-Vera, A. and Martin, A. (2011), “Gender and management on Spanish SMEs: an empirical
analysis”, International Journal of Human Resource Management, Vol. 22 No. 14, pp. 2852-2873.
Nguyen, H. and Faff, R. (2012), “Impact of board size and board diversity on firm value: Australian
evidence”, Corporate Ownership and Control, Vol. 4 No. 2, pp. 24-32.
O’Connor, P. (2015), “Influence of money in politics a top concern for voters”, Wall Street Journal,
June 21, available at: http://blogs.wsj.com/washwire/2015/06/21/influence-of-money-in-politics-a-
top-concern-for-voters/
Pan, Y. and Sparks, J.R. (2012), “Predictors, consequence, and measurement of ethical judgments:
review and meta analysis”, Journal of Business Research, Vol. 65 No. 1, pp. 84-91.
Peters, G.F. and Romi, A.M. (2014), “Does the voluntary adoption of corporate governance mechanisms
improve environmental risk disclosures? Evidence from greenhouse gas emission accounting”,
Journal of Business Ethics, Vol. 125 No. 4, pp. 637-666.
Petersen, M.A. (2009), “Estimating standard errors in finance panel data sets: comparing approaches”,
Review of Financial Studies, Vol. 22 No. 1, pp. 435-480.
Porter, E. (2015), “Corporations open up about political spending”, New York Times, June 9,
available at: www.nytimes.com/2015/06/10/business/corporations-open-up-about-political-
spending.html?_r=0
Post, C. and Byron, K. (2015), “Women on boards and firm financial performance: a meta-analysis”,
Academy of Management Journal, Vol. 58 No. 5, pp. 1546-1571.
Rao, K.K., Tilt, C.A. and Lester, L.H. (2012), “Corporate governance and environmental reporting: an
Australian study”, Corporate Governance: The International Journal of Business in Society,
Vol. 12 No. 2, pp. 143-163.
Robinson, J.R., Xue, Y. and Yu, Y. (2011), “Determinants of disclosure noncompliance and the effect of
the SEC review: evidence from the 2006 mandated compensation disclosure regulations”, The
Accounting Review, Vol. 86 No. 4, pp. 1415-1444.
Rose, C. (2007), “Does female board representation influence firm performance? The Danish evidence”,
Corporate Governance: An International Review, Vol. 15 No. 2, pp. 404-413.
Shleifer, A. and Vishny, R.W. (1986), “Large shareholders and corporate control”, The Journal of
Political Economy, Vol. 94 No. 3, pp. 461-488.
Singh, V., Vinnicombe, S. and Johnson, P. (2001), “Women directors on top UK boards”, Corporate Board gender
Governance: An International Review, Vol. 9 No. 3, pp. 206-216. diversity
Srinidhi, B., Gul, F.A. and Tsui, J. (2011), “Female directors and earnings quality”, Contemporary
Accounting Research, Vol. 28 No. 5, pp. 1610-1644.
Stein, M.L. and Maxwell, M. (2016), “Investors push for fuller picture of corporate political
contributions: donations to trade groups, candidates and political-action committees attract
more scrutiny”, Wall Street Journal, April 4.
Sunden, A.E. and Surette, B.J. (1998), “Gender differences in the allocation of assets in retirement
savings plans”, The American Economic Review, Vol. 88 No. 2, pp. 207-211.
Terjesen, S., Sealy, R. and Singh, V. (2009), “Women directors on corporate boards: a review
and research agenda”, Corporate Governance: An International Review, Vol. 17 No. 3,
pp. 320-337.
Torres-Reyna, O. (2007), Panel Data Analysis Fixed and Random Effects Using Stata (v. 4.2), Data &
Statistical Services, Princeton University, Princeton, NJ.
Vera-Munoz, S.C. (2005), “Corporate governance reforms: redefined expectations of audit committee
responsibilities and effectiveness”, Journal of Business Ethics, Vol. 62 No. 2, pp. 115-127.
Verrecchia, R.E. (1983), “Discretionary disclosure”, Journal of Accounting and Economics, Vol. 5 No. 2,
pp. 179-194.
Wang, I. (2007), “Private earnings guidance and its implications for disclosure regulation”, The
Accounting Review, Vol. 82 No. 5, pp. 1299-1332.
Wang, J. and Dewhirst, H.D. (1992), “Boards of directors and stakeholder orientation”, Journal of
Business Ethics, Vol. 11 No. 2, pp. 115-123.
Watts, R.L. and Zimmerman, J.L. (1978), “Towards a positive theory of the determination of accounting
standards”, The Accounting Review, Vol. 53 No. 1, pp. 112-134.
Watts, R.L. and Zimmerman, J.L. (1986), Positive Accounting Theory, Prentice-Hall, Englewood
Cliffs, NJ.
Zhu, H., Small, K. and Flaherty, S. (2010), “An examination of female participation on US board
subcommittees”, Journal of Business and Management, Vol. 16 No. 2, pp. 153-166.
ARA Appendix
Variable Definition
CPD Total summed raw score of the disclosure category divided by the total 36 available
TRANSPARENCY points (CPA–Zicklin data items 1–9)
POLICY Total summed raw score of the policy category divided by the total 16 available
TRANSPARENCY points (CPA–Zicklin data items 10–16)
GENDER Measured as the percentage of women on the board of directors (Bloomberg field
code: %_WOMEN_ON_BOARD)
GOVERNANCE A proprietary Bloomberg score based on the extent of a company’s governance
disclosure of environmental, social and governance (ESG) data. The score ranges
from 0.1 for companies that disclose the minimum amount of governance data to 100
for those that disclose every data point collected by Bloomberg
(GOVERNANCE_DISCLOSURE_SCORE)
DIRINDEP Measured as the percentage of independent board members (Bloomberg field code: %
_INDEPENDENT_DIRECTORS)
BOARDSIZE Measured as the number of board members (Bloomberg field code: BOARD_SIZE)
SIZE Measured as the natural log of the market value of equity (Bloomberg field code:
HISTORICAL_MARKET_CAP)
LEV Measured as the book value of total liabilities divided by book value of total assets at
the end of each fiscal year (Bloomberg field code: BS_TOT_LIAB2/
BS_TOT_ASSET)
TOBINSQ Measured as the market value of equity plus the book value of total liabilities,
preferred stocks and minority interest divided by the book value of total assets
(Bloomberg field code: TOBINS_Q)
ROA Measured as the net income divided by average total assets (Bloomberg field code:
Trail_12M_Net_Inc/BS_TOT_Asset)
ANALYST Measured as the total number of analysts making recommendations for the security,
measured at the end of each fiscal year (Bloomberg field code:
TOT_ANALYST_REC)
INSTITOWN Measured as the percentage of freely traded shares held by institutions to the number
of float shares outstanding. 13Fs, mutual funds, NAICs, schedule D holdings and
institutional stake holdings are taken into account to compute the number of shares
held by institutions (Bloomberg field code: PCT_FLT_SHARES_INSTITUTIONS)
Table AI. R&DTA Measured as the percentage of research and development expense to total assets; all
Definition of variables missing values are set to 0
Corresponding author
Yan Luo can be contacted at: yluo@sdsu.edu
For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com

Asian Review of Accounting: Article Information

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Asian Review of Accounting: Article Information

Uploaded by

Copyright:

Available Formats

Asian Review of Accounting

Does board gender diversity affect the transparency of corporate political

*Related content and download information correct at time of download.

Abstract Accepted 30 April 2018

2. Literature review and hypothesis development

2.2 Corporate political disclosure

competitive positions (e.g. government procurement contracts or tax incentives) (Goldman

supported by some stakeholders while being opposed by other stakeholders. According to

3. Research design and sample selection

þb11 R&DTA þI ndustry Fixed Ef f ects

POLI CY TRAN SPAREN CY it ¼ b0 þ b1 GEN DERit þb2 GOV ERN AN CE

a positive sign is predicted for this variable.

3.3 Sample selection

4. Results and discussion

4.2 Correlation matrix

Variable Min. Max. Mean Median SD Skewness Kurtosis

CPD TRANSPARENCY 0 100 38.293 33.333 33.416 0.304 1.635

4.3 Univariate means difference test

4.4 Multivariate regression analyses

4.5 Sensitivity tests

POLICY TRANSPARENCY 72.663 52.569 20.094 9.629 0.000***

GENDER (H1) + 0.465*** (2.981)

Constant −147.400*** (−4.889)

Variable Predicted sign p-value (robust and clustered t-statistic)

GENDER (H1) + 0.425*** (2.931)

5. Conclusions, limitations and future research

Vol. 91 No. 4, pp. 1095-1102.

compensation”, Journal of Accounting and Economics, Vol. 35 No. 3, pp. 285-314.

You might also like