This study introduces influential-female-directors as a board-gender-diversity variable that captures not only the female representation on the board but also their position on the informal-boardroom-hierarchy. Further, this study investigates whether such directors have a significant influence on the dividend-payout-decisions of leading firms in an emerging economy, India, where concentrated ownership is prevalent and explores the moderation effect they exert on dividend–ownership relationship.
This study uses generalized methods of moments (GMM) to tackle the issues put forth by the sample of 450 firm-year observations.
This study finds that influential-female-directors have a significant influence on the dividend-payout-decisions of the firm. Additionally, the presence of female directors in the audit-committee makes the board more vigilant and encourages foreign institutional investors to expect more dividends. Furthermore, domestic institutional investors expect a return on their investments through share price appreciation rather than dividends, and the influence of promoters in dividend-payout-decisions is reduced in the presence of such directors.
This study pioneers the use of influential-female-directors as a board-gender-diversity metric and carries an in-depth analysis of the influence and moderation effect they exert on the dividend-payout-decisions of the board and the dividend expectations of different institutional investors, respectively.
