García Lara, Juan M. and Garcia Osma, Beatriz and Mora, Araceli and Scapin, Mariano P., Gender Discrimination and the Monitoring Role of Female Directors Over Accounting Quality (February 15, 2016). Available for download at SSRN: http://ssrn.com/abstract=2732588

“Recent research suggests female directors exert more stringent monitoring over the financial reporting process than their male counterparts. We re-examine this claim by studying whether gender-driven inequalities in accessing corporate boards have an impact on the monitoring role of boards of directors. We focus on the association between the presence of female directors, gender biases, and financial statements quality. Using a large sample of UK listed firms we find that a larger percentage of women among independent directors is significantly associated with lower earnings management practices. We further show that this relation disappears if we focus on firms that do not discriminate against women in the access to directorships. Finally, consistent with this view that discrimination affects earnings quality, we provide evidence that gender biases (discrimination) are associated with lower earnings quality. We interpret our evidence as consistent with (1) prior evidence that males and females do not differ substantially when performing the same role in highly specialized positions and with (2) discrimination being an important factor explaining the association between female directors and accounting quality.”