Impact of Board Gender Diversity on the Level of Accounting Conservatism: An analysis of UK Firms

Abstract

The main objective of this study is to examine the impact of board gender diversity on accounting conservatism of United Kingdom based 100 companies which are listed on FTSE100 during the period from year 2009 to year 2022. By consider the main objective of this study, descriptive statistics, correlation matrix, pooled OLS regression analysis and random effects panel regression analysis have been performed in STATA as statistical analysis tools by consider the accounting conservatism as dependent variable, board gender diversity as independent variable along with firm size, leverage, profitability, and sale growth as control variables. The findings of empirical analysis suggest that board gender diversity is positively and significant linked with accounting conservatism of the selected firms. Furthermore, there is significant but negative relationship exist between accounting conservatism with firm size, profitability, and leverage. This study does not find any significant evidence in favour of the relationship between accounting conservatism and sale growth of UK selected firms. The findings of this study have some significant implications for policy makers, expertise, government authorities and other regulators to make and implement policies, rules and regulations more efficiently regarding board gender diversity, accounting conservatism and other significant financial reporting standards and governance process. Like other studies, this study also has some limitations due to limited data sample which may be insufficient to represent the population that having gender diversity on the accounting conservatism in UK, and limited period, which was 11 years starting from 2009 until 2022, thus the research can’t generalize the result of UK firms, also it may have other factors that may impact that not considering in this research. Recommendations for future research are suggested, including expanding the sample size including firms with different backgrounds, geographic locations not only UK, and different time series, also future research should examine other factors that they might effect on the accounting conservatism with different industries.