Gema del C. Fleitas-Castillo, Jerónimo Pérez-Alemán, Domingo Javier Santana-Martín
{"title":"Board gender diversity and cash holding: the effect of family ties","authors":"Gema del C. Fleitas-Castillo, Jerónimo Pérez-Alemán, Domingo Javier Santana-Martín","doi":"10.1007/s11846-024-00788-4","DOIUrl":null,"url":null,"abstract":"<p>Using a sample of 630 firm-year observations of non-financial Spanish listed companies for the period 2004–2020, this study examines linkages of family and non-family female directors and cash holding. We show that family and non-family female directors affect cash holdings differently. When the presence of family female directors is scarce, their role is eclipsed, thereby encouraging actions related to family goals and increasing cash holdings. However, when the presence of family female directors reaches a critical mass, the cohesion between the interests of the dominant family and external investors increases, thereby reducing the level of cash holdings. When the number of non-family female directors is low, the cash level of family firms is reduced, suggesting that non-family female directors encourage the family firm’s cash reduction as a result of their greater capacity to control and their orientation towards an effective corporate governance system. This cash-decreasing effect will occur even if the number of non-family female directors is low, since the purpose of appointing non-family female directors is less likely to be symbolic. In addition, non-family female directors are concerned about threats to reputational capital, such that reducing cash holdings would promote their reputation as credible supervisors, protect their current appointments, and also boost the likelihood of future appointments. However, the presence of a critical mass of non-family female directors becomes a sufficiently powerful instrument of control and legitimation for external investors, allowing for increased cash levels without increasing agency conflicts.</p>","PeriodicalId":20992,"journal":{"name":"Review of Managerial Science","volume":"72 1","pages":""},"PeriodicalIF":7.8000,"publicationDate":"2024-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Managerial Science","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1007/s11846-024-00788-4","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0
Abstract
Using a sample of 630 firm-year observations of non-financial Spanish listed companies for the period 2004–2020, this study examines linkages of family and non-family female directors and cash holding. We show that family and non-family female directors affect cash holdings differently. When the presence of family female directors is scarce, their role is eclipsed, thereby encouraging actions related to family goals and increasing cash holdings. However, when the presence of family female directors reaches a critical mass, the cohesion between the interests of the dominant family and external investors increases, thereby reducing the level of cash holdings. When the number of non-family female directors is low, the cash level of family firms is reduced, suggesting that non-family female directors encourage the family firm’s cash reduction as a result of their greater capacity to control and their orientation towards an effective corporate governance system. This cash-decreasing effect will occur even if the number of non-family female directors is low, since the purpose of appointing non-family female directors is less likely to be symbolic. In addition, non-family female directors are concerned about threats to reputational capital, such that reducing cash holdings would promote their reputation as credible supervisors, protect their current appointments, and also boost the likelihood of future appointments. However, the presence of a critical mass of non-family female directors becomes a sufficiently powerful instrument of control and legitimation for external investors, allowing for increased cash levels without increasing agency conflicts.
期刊介绍:
Review of Managerial Science (RMS) provides a forum for innovative research from all scientific areas of business administration. The journal publishes original research of high quality and is open to various methodological approaches (analytical modeling, empirical research, experimental work, methodological reasoning etc.). The scope of RMS encompasses – but is not limited to – accounting, auditing, banking, business strategy, corporate governance, entrepreneurship, financial structure and capital markets, health economics, human resources management, information systems, innovation management, insurance, marketing, organization, production and logistics, risk management and taxation. RMS also encourages the submission of papers combining ideas and/or approaches from different areas in an innovative way. Review papers presenting the state of the art of a research area and pointing out new directions for further research are also welcome. The scientific standards of RMS are guaranteed by a rigorous, double-blind peer review process with ad hoc referees and the journal´s internationally composed editorial board.