Gender Diversity in Corporate Governance and Earnings Management: An Indian Panorama

Abstract

The shifting paradigm of decision making drivers from volume based to value based in recentrisk-takingepoch of earnings managementcalls for theoptimistic generative choiceswithin a systemto suit complex and adaptive challenges.As gender identity often questions the groups efficacy in achieving its target and therefore, this study attempted to trace certainupshots of financial reporting practiceswhen digging drivers of decisions aretriggered by the Women Directors (WD) in corporate boardrooms.  For analysis, this study considered archival data of Indian firms for a period of five years totest the proposed conjecture and to explore the role of driving constructs in reportingearning levels and their variances. With the help of different analytical tools it is found that women representation in Indian corporate boardroom varied around 5 percent to 12 percent and more interestingly it is found that after the implementation of the new Companies Act, 2013 (CA, 2013) women representation has been increasing at double rate compared to preceding years under consideration. Further analysisvalidate that though there are differences in proportionate representation of WD among the firms across the different industriesbut the number is not significant in any caseand it signals that the presence of female director(s) principally reduces the discretionary accruals and conclude with a discussion that the WD on the boardroom may influence the discretionary earnings management behaviour in Financial Reporting (FR) in developing economy like India.