Company Reporting: Female Board Representation and the Use of Gender-diversity Language

Abstract

It is generally understood that women are under-represented in the boards of UK firms, with homogeneous boards increasingly perceived as being unfair. An organisation’s true gender diversity values, and the influence that women on boards have upon them, may be discernible from the language used in firms’ annual reports. This study, quantitatively examining data from fifty UK FTSE-listed firms from across ten sectors, finds that there is a moderately positive correlation between the number of women on the boards of firms and the use of gender diverse terminology in those same firms’ annual reports. This study also provides descriptive statistics on the gender composition of executive boards, including the commonly reported Blau diversity index value, and of the gender diversity language used in the sampled reports. The findings support arguments that, as more women enter the boardroom, they positively affect reporting quality, and possibly the firm and its values more widely, and that their contributions are not marginalised. However, if reporting narratives are primarily used as a stakeholder impression management tactic, then the results of this study suggest that women on boards may be complicit in such strategies.