Boardroom gender diversity and corporate environmental performance: a multi-theoretical perspective in the MENA region

• DOI: https://doi.org/10.1108/IJAIM-05-2021-0101
• Published date: 06 October 2021
• Date: 06 October 2021
• Pages: 603-630
• Subject Matter: Accounting & finance,Accounting/accountancy,Accounting methods/systems
• Author: Ayman Issa,Mohammad A.A. Zaid

Boardroom gender diversity

and corporate environmental

performance: a multi-theoretical

perspective in the MENA region

Ayman Issa and Mohammad A.A. Zaid

Department of Accounting, Dongbei University of Finance and Economics,

Dalian, China

Abstract

Purpose –Drawing on the multi-theoreticalperspective, the primary purpose of this paperis to empirically

investigate the inextricably entwined nexus between board gender diversity and corporate environmental

performancewithin cross-country context.

Design/methodology/approach –Multiple regression analysis on a cross-country panel data analysis

was used. Further, the authors applied static panel data estimator ordinary least squares (OLS) as a baseline

model with different proxies of gender diversity. In addition, to control for the potential endogeneity problem and

providing robust f‌indings, the authors run two-stage least squares (2SLS) and lagged independent variables.

Findings –The f‌indings clearly unveiled that corporate environmental performance is positively and

signif‌icantlyaffected by the level of gender diversity on board. This inextricableand intimate nexus is vastly

attributedto the argument that female directors show greaterconcerns for eco-friendly activities.

Practical implications –The f‌indings of this study provide useful and fruitful insights for regulatory

parties and policymakers to mandate gender quota in electing boardroom members to ameliorate corporate

environmentalperformance.

Originality/value –Tothebestoftheauthors’knowledge, most of the prior studies have not yet provided a

multi-theoretical analysis of the effect of board gender diversity on environmental performance. Thereby, this study

handled this contemporary gap and went beyond the narrow perspectives by diving deepw ithc ross-countryanalysis.

Keywords Board gender diversity, Environmental performance, MENA countries,

Environmental policies, Multi-theoretical perspective

Paper type Research paper

1. Introduction

In recent years, pursuing eco-friendly business activities has been a controversial topic

(Gangi et al.,2019). Thereby, companies manifest augmentingsolicitude for involvement in

social and environmental initiatives(Zaid et al., 2020a). In this vein, the research community

has paid a deep-seated attention on corporate environmental performance (CEP).

Furthermore, the regulators around the globe incline to enact laws on the promotion of

cleaner production practices, particularly, in developing nations where people are

confronting both environmentaland resource challenges (Geng et al.,2010).

The authors would like to express their sincere appreciation to the editors “Prof. Maggie Liu and

Dr Xin Luo”, and three anonymous reviewers for their valuable and constructive comments.

Authors have equally contributed in this research paper and should be treated as a joint f‌irst

author.

Boardroom

gender

diversity

603

Received17 May 2021

Revised29 June 2021

Accepted14 July 2021

InternationalJournal of

Accounting& Information

Management

Vol.29 No. 4, 2021

pp. 603-630

© Emerald Publishing Limited

1834-7649

DOI 10.1108/IJAIM-05-2021-0101

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1834-7649.htm

It has been mightily debated that prof‌it maximization is still the predominant goal for

survival. Notwithstanding, at the present time, f‌irms show increasing attention to involvement

in environmental practices via “eco-friendly initiatives”(Lo and Kwan, 2017;Flammer, 2013).

As a consequence, entities should run an environmentally friendly business, and not merely act

in a pure f‌inancial context (Zaid et al., 2020a). The coherent reason that stands behind this

dialectical point is that stakeholders may have various orientations, for instance, some

stakeholders may cast light on the f‌inancial side whereas others are concerned with the

deleterious inf‌luence of f‌irm’s actions on the environment (Liao et al., 2015). This, in turn, has

amplif‌ied ongoing concerns over how companies are governing their activities and what

governance structures can eff‌icaciously inf‌luence social and environmental business demeanor

(Walls et al., 2012). Under such circumstances, the conversation around this contemporary issue

tends to ebb and f‌low with the level of eco-social initiatives. Hence, nowadays, entities are more

likely to integrate environmental aspects in their agenda as an integral part of their

performance and perennial sustainable future.

Given the aforementioned discussion, well-governed companies are more likely to be

engaged in environmentally activities (Zaid et al., 2020b;Gangi et al.,2019;Jamali et al.,

2008). It is clear that sound governance mechanisms entail responsibility and due regard to

satisfy and meet the desires of different groups of stakeholders (Kendall, 1999), including

but not limited to social and environmental dimensions. Accordingly, a conclusion can be

drawn that f‌irms with sketchy and patchy corporate governance practices cannot yield

signif‌icant progressin amelioratingenvironmental practices.

It is conceivable that members on the board of directors are deemed the main decision-

makers regardingcorporate social and environmental strategies.Therefore, diversity, and in

particular the role of women in the boardroom, plays a favorable role in reinforcing

environmental performance (Birindelli et al.,2019;Kassinis et al.,2016), prosperous and

clean production and green planet for future generations. The entrenched logic behind this

argument is that the presence of women on the board brings values, skills and experience

that are different from men (Amorelli and García-S

anchez, 2020b). Furthermore, women are

more likely to have a better perceptionof environmental risks (Davidson and Freudenburg,

1996), and minimize risk in general (Adel et al.,2019). In a nutshell, a boardroom with a

balanced number of women and men is considered a prerequisite to guarantee the felicitous

implementationof environmental strategies.

Although a vast arrayof earlier studies have sought to clarify driving forces of corporate

environmental performance, this area has not been yet extensively studied and still in its

infancy phase(Birindelli, 2019;Rao and Tilt,2016;Zaid et al., 2020a). In other words, research

on the nonf‌inancial side is restricted in comparison to the f‌inancial dimen sion. Hence, the

overwhelming majority of existing literature has been dedicated to analyzing the impact of

gender diversity on f‌irm f‌inancial performance (Reguera-Alvarado et al.,2017:Vafaei et al.,

2015;Erhardt et al.,2003). Furthermore, preceding scholarly articles have paid tremendous

effort on aggregate measure of corporate social responsibility (CSR) as a conf‌iguration of

more than one pillar(i.e. social, environmentaland economic dimensions) ratherthan on CEP

per se (Rao and Tilt,2016;Harjoto et al.,2015;Beji et al.,2020;Zaid et al.,2019;Issa and Fang,

2019;Yarram and Adapa, 2020). Under such circumstances, it is undoubtedly that our

perception of the nexus between gender diversity and environmental performance is

arguably incomplete and still debatable. In keeping with the above argument, our current

empirical studyoffers exhaustive and meticulous spectacleby delving deeper and solely into

the intimaterelationship betweengender diversity and theenvironmental performancepillar.

Given the many above-mentioned facts, this study makes remarkable contributions in

three aspects. First, most of the contemporaryprior studies investigating the nexus between

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