UNVEILING THE DYNAMICS: CORPORATE GOVERNANCE AND EARNINGS MANAGEMENT IN PRESENCE OF BOARD GENDER DIVERSITY

Abstract

The main objective of this research is to identify the relationship between corporate governance and earnings management in the presence of board gender diversity. The unit of analysis is sugar sector of Pakistan, listed on PSX 100 index. This study has analyzed the data from 2011 to 2020. data collection is made through audited company’s annual reports. Purposive sampling technique has been used on the basis of medium and large sugar companies. Moreover, moderated regression model has been used to empirically conjecture the hypothesis. The empirical results show that board gender diversity significantly moderates the relationship between corporate governance and earnings management. The result revealed that when board size is diverse through gender diversity it will reduce the earnings management in the firms. Overall, strong board gender diversity in corporate governance significantly reduces the earnings management in the sugar sector of Pakistan listed companies on PSX 1oo index, The findings suggest that regulators and policymakers should reconsider their policies and reforms to increase board gender diversity by increasing the number of female directors, including at least one woman, and the proportion of independent female directors on boards in Pakistan.