Gender-diverse boards and related party transactions: What makes the difference?

Using the data of French publicly listed companies, we investigate the effect of board gender diversity on related party transactions (RPTs) by considering the role of female directors’ specific (statutory and demographic) attributes. The results of system generalized method of moments regression analysis shows that firms with gender-diverse boards engage less in RPTs. We also find that the consideration of specific (i.e., statutory and demographic) attributes of female directors in regression analysis changes the nature of the association between board gender diversity and RPTs from negative to positive, suggesting that the simple presence of female directors is a necessary but not sufficient condition for effective board decision making. With regard to the specific attributes of female directors, we find that business expertise and audit committee memberships discourage the use of RPTs. On the other hand, leadership and experience enhance the disclosure of RPTs. Our study contributes to the debate concerning the appointment of women to corporate boards, since female directors’ attributes are the primary drivers of board effectiveness.