Board Gender Diversity and Investment Inefficiency with a moderating role of the board independence and the CEO tenure

Abstract

Women are more risk-averse and more conservative in making investment decisions.This research examines the relationship between the gender diversity of the board of directors and the investment inefficiency of companies listed on the Tehran Stock Exchange. The argument is that companies with gender diversity of the board of directors have lower investment inefficiency than companies without gender diversity of the board of directors, and the presence of female directors in the board of directors has a negative relationship with investment inefficiency.This research is quasi-experimental. Also, considering that the results of the research deal with solving a specific problem or issue, it is applied in terms of purpose and in terms of method, correlation analysis with regression approach. Considering that this research uses past information to test hypotheses, it is retrospective. In order to examine this issue, research hypotheses were selected based on a statistical sample consisting of 108 stock companies (based on systematic exclusion) during the years 2017 to 2021 (540 observations) and tested using multivariate regression models.The analysis of the research sample shows that there is a significant negative relationship between the gender diversity of the board of directors and investment inefficiency. The results also showed that board independence moderates the relationship between board gender diversity and investment inefficiency. But CEO tenure does not moderate the relationship between board gender diversity and investment inefficiency.

Keywords

• board independence
• ceo tenure
• diversity
• gender
• investment efficiency