Top Executive Gender Diversity and Earnings Quality: Evidence from Russia

Nowadays, there is no consensus about how gender diversity in company's management affects their effectiveness in business and finance. There are studies that demonstrate a positive relationship between the presence of females (on top positions and on the board of directors) and the economic success of firms. On the contrary, some papers show negative relationship and others do not show a statistically significant relationship between females and economic success. In Russia, this issue remains insufficiently investigated. This paper explores whether the gender of top executives affects earnings quality, using a sample of 135 Russian listed firms over a 5-year (2012-2016) period. We examine how CFO gender and presence of females on corporate boards affects earnings quality of a firm. Also, we examine association between number of females on corporate board and efficiency of a company. Our results of a panel study show that earnings quality proxies, including earnings persistence, the correctness of current earnings in predicting future cash flows and relationship between earnings and stock returns do not display significant differences for firms with female CFO and male CFO. At the same time, we get that females on the board of directors influence significantly negative on earnings persistence but have a significantly positive effect on effectiveness of a company.