Women on boards, firm earnings
management (EM) and performance
nexus: does gender diversity moderate the
EM–performance relationship?
Emmanuel Mensah and Joseph Mensah Onumah
Abstract Emmanuel Mensah is
Purpose – This paper aims to shed light on an essential role that ‘‘female directors’’ on boards of based at the Department of
companies in sub-Saharan Africa play towards corporate financial performance enhancement. The study Accounting, University of
observes how board gender diversity moderates the relationship between earnings management (EM) Professional Studies,
and financial performance of firms in sub-Saharan Africa from a dynamic perspective. Accra, Ghana. Joseph
Design/methodology/approach – The study’s sample comprises 105 companies listed on the Mensah Onumah is based
respective stock markets of nine sub-Saharan African countries. The data are collected from annual
at the Department of
reports over the period 2007–2019, a total of 1,166 firm-year observations. Panel data models are used in
Accounting, University of
the analyses.
Findings Ghana, Accra, Ghana.– The study finds that the performance effect of EM is contingent on board diversity and this
finding persists even after controlling for dynamic endogeneity, simultaneity and unobserved time-
invariant heterogeneity inherent in the EMandperformance relationship.
Research limitations/implications – The findings should be understood within the context that, only
available annual reports and audited financial statements that were filed with respective capital markets
of the nine surveyed countries are used as source of information.
Originality/value – The current study is unique, in that, it is the first panel multi-cross-country
investigation within Africa to introduce gender diversity in the study of the relationship between EM and
firm performance. It therefore extends the agency theory by using gender diversity as a moderating
variable in the EM–firm performance nexus.
Keywords Earnings management, Board gender diversity, Firm performance, Dynamic modelling,
Sub-Saharan Africa
Paper type Research paper
1. Introduction
Boardroom gender diversity has been a topical issue in recent times in the board and JEL classification – C33, C38,
governance literature, which spells out various functions of a well-diversified board (Mukarram G30, G34, M41
et al., 2018). The effort to improve gender diversity in the corporate workforce has been
gaining momentum in many parts of the world owing to the acclaimed recognisable qualities Received 16 June 2022
Revised 12 November 2022
and attributes females bring on the table (Mathisen et al., 2013), which leads to better Accepted 30 December 2022
decision-making (Davies, 2011). In addition, self-evident social justice view is that a gender-
The authors gratefully
diverse board is a step towards equal opportunities for females at the upper echelons of the acknowledge the journal
firm (Dowling and Aribi, 2013). Some studies in the past have suggested that female directors editors and anonymous
reviewers who offered
tend to have a positive effect on a number of corporate outcomes, performance and stock constructive comments and
price informativeness (Carter et al., 2003; Gul et al., 2011, 2013; Srinidhi et al., 2011; Kirsch, suggestions towards
enhancing the quality of their
2018). Galbreath (2011) argued that gender-diverse boards are more efficient in monitoring of paper.
DOI 10.1108/CG-06-2022-0262 © Emerald Publishing Limited, ISSN 1472-0701 j CORPORATE GOVERNANCE j
agents and ensuring that firms maintain ethical standards, thus minimising the ineffective use
of shareholders’ funds that can be misused (Galbreath, 2011). On the contrary, some other
studies such as Adams and Ferreira (2009) find an ambiguous effect of female directors on
firm performance, whereas Vuong (2021) found the representation of women on boards to
contribute to managerial opportunism. The empirical evidence, therefore, regarding the
benefits of a having a gender-diverse board, and particularly the role of gender diversity in
monitoring managerial behaviour, as well as the effect of board gender diversity on firm
performance, is still emerging and has largely been mixed (Arioglu, 2020; Triki Damak, 2018),
which gives the impetus for further investigations.
The role of the board in ensuring that corporate strategic objectives aimed at delivering value to
its varied stakeholders are met requires them to bring on board diverse skills, including superior
monitoring skills on managerial behaviour to minimise opportunism and promote interest
alignment. Corporate board members have different characteristics such as beliefs, personalities,
gender, ethnicity and qualification, along with unique attributes, skills and experience sets which
they bring to bear on their roles in the boardroom. These characteristics, particularly gender, with
its attendant attributes may be able to explain the superior monitoring abilities of boards
particularly with respect to earnings management (EM) monitoring towards firm performance
enhancements. The influence of women directors on board roles and corporate outcomes,
including monitoring a firm’s EM practices to enhance performance, deserves theoretical and
empirical investigation, because of the emphasis being placed on board room gender diversity
as a part of good corporate governance (CG; Adams and Ferreira, 2009; Cumming et al., 2015;
Nguyen et al., 2020). Moreover, the phenomenon of managerial EM behaviour which have been
noted to occur in firms (Beneish, 2001) can have devastating consequences if it is
opportunistically deployed (Healy and Wahlen, 1999; Cimini, 2015), and hence the need for
monitoring to limit managerial behavioural excesses. Herein come women directors on boards,
who are generally noted to possess superior monitoring abilities and characteristics (Zalata et al.,
2019b, 2021).
EM is a persistent financial reporting phenomenon that occurs in every capital market
(Beneish, 2001). EM occurs when managers exercise discretion over the accounting
numbers either within or without the confines of GAAP. Prior research work on the
phenomenon of EM have identified the practice of managerial EM to have a significant
effect on the “bottom-line profits” of a firm which often bubbles up in devastating
accounting scandals and collapse of businesses (see, e.g. Enron, WorldCom, Tyco, Arthur
Andersen, etc.). EM is usually deployed either efficiently when it positively impacts
performance, or opportunistically when it negatively impacts performance, with the extant
literature documenting largely of opportunistic motives of EM practices. This has raised the
demand for research on the reasons for manipulating accounting figures and their effect on
performance as well as measures to limit the practice of EM (Cimini, 2005; Filip and
Raffournier, 2014). This study therefore seeks to contribute to the debate on the role that a
gender-diverse board plays towards constraining EM practices of firms and consequently
enhance firm performance, using samples from Anglophone sub-Saharan Africa. The
setting for the conduct of this study was motivated by the fact that most African countries
are not pro-diversity, and in many instances, women are largely marginalised (Boadi et al.,
2022). In addition, progress in terms of gender diversity on corporate boards has been slow
and rife with tokenism in spite of the fact that gender equality or equity has featured
prominently on the global development agenda for more than two decades (Sotola, 2019).
Investigating the role that a gender-diverse board plays in terms of limiting managerial
opportunism in corporations within sub-Saharan Africa is envisaged to ignite the awareness
and universal appeal for gender-diverse boards in African firms. The motivation of this
research may be summed up in two essential questions:
Q1. Does gender diversitymatter in the EM–firm performance relationship?
Q2. What role does gender diversity play in the EM–firm performance relationship?
j CORPORATE GOVERNANCE j
The relationship between EM and firm performance has been widely researched usually
from the perspective of agency theory using static frameworks. However, the dynamic
nature of this relationship is largely unknown and poorly understood in African markets and
elsewhere. The current study, therefore, reinvestigates the causal relationship between EM
and performance predicted by the traditional agency theory from a dynamic perspective
under the premise that EM and CG mechanisms are by construction dynamically related to
firm performance [1]. This dynamic nature implies that the current EM, CG structures and
performance of a firm are affected by past performance (Wintoki et al., 2012). The causality
may also run in the opposite direction, i.e. from past performance to current governance
structures and EM. This is recognised as another source of endogeneity called dynamic
endogeneity (Wintoki et al., 2012; Nguyen, 2015a). With the presence of potential dynamic
endogeneity, simultaneity and reverse causality in view, we question the efficacy of EM in
contributing to firm performance once its dynamic nature is taken into consideration, while
at the same time examining the role gender diversity plays in this nexus. By examining the
role that gender diversity plays in the EM–firm performance nexus, we hope to shed some
light on the ability of female directors to curb opportunistic behaviour of management
including EM. Opportunistic EM practices send a negative signal to market participants on
the financial health and future growth prospects of the firm, thereby eliciting a negative
response from investors and creditors who cut back on their investments with the firm. With
the firm experiencing hard capital rationing or financing constraints, it is unable to exploit
real opportunities for growth and, consequently, its current and long-term performance
suffers. However, with the monitoring and constraining effect of board gender diversity on
opportunistic EM, efforts by managers to enhance profitability are undertaken by increasing
the operational activities of the firm. Increased corporate operational activities invariably
contribute towards corporate performance enhancement, which also inures to the benefit of
both managers and shareholders (Mahrani and Soewarno, 2018). Alternatively, the
mechanism through which constrained EM would lead to firm performance enhancement
could be explained as follows: the monitoring effect of board gender diversity elicits
efficient EM practices from managers such as smoothing or postponing real earnings
recognition to influence the total corporate tax burden; this sends a positive signal to market
participants on a healthier management of the financial state of the firm; investors and
creditors extend more investible funds to the firm, thus allowing the firm to exploit real
opportunities for growth and enhancement of its financial performance.
The present study is novel in several ways:

 It is the first multi cross-country investigation within Africa to introduce gender diversity
in the study of the relationship between EM and firm performance. Panel investigations
of the phenomenon of EM and its attendant effects have largely been non-existent
within the African context, hence our contribution in this regard.

 It is one of the few studies of this nature to use a dynamic modelling approach in its
investigation under the premise that the EM–firm performance relationship is by
construction dynamic. This study further contributes to knowledge in this subject area
by observing the moderating role of board gender diversity in the EM–firm performance
relationship.

 The study also observes that, besides the performance effect of EM being contingent
on board–gender diversity within static frameworks, this effect still persists even after
controlling for dynamic endogeneity, simultaneity and unobserved time-invariant
heterogeneity inherent in the EM and firm performance relationship, which further
enhances our understanding in this area. Besides, by doing so, our study also
responds to calls from prior researchers in this area for using dynamic panel models in
corporate finance, reporting and governance research (Flannery and Hankins, 2013;
Tang and Chang, 2013; Wintoki et al., 2012; Zhou et al., 2014).
j CORPORATE GOVERNANCE j

 The study’s findings support the prediction of agency theory regarding the efficient
monitoring effect of a gender-diverse board in constraining EM practices, and
consequently enhancing the performance of firms.
The structure of the remainder of this paper is as follows. A brief background of the setting and
context within which the study was conducted is presented in Section 2. A theoretical literature
review is presented in Section 3, followed by an empirical literature review from which research
hypotheses are developed in Section 4. Section 5 details the research design, followed by the
study’s empirical results and discussion in Section 6. Section 7 presents the summary and
conclusions indicating the study’s limitations with some suggestions for future research.
2. Study background and context
As already noted, the study focuses its investigation on the unique context of Anglophone
sub-Saharan African economies that have largely been absent from cross-country panel EM
investigations (Callao et al., 2014a, 2014b). Developing countries within sub-Saharan Africa,
which are predominantly Anglophone, share similar characteristics. All of them have their
CG codes patterned after South Africa’s King Report I, II or III (Mangena and Chamisa,
2008; Waweru and Ntui, 2018). In addition, all of them being former British colonies belong
to the British Commonwealth of States and have their legal systems originate from British
common law. These countries usually uphold certain common values, and have ties that
bind them together, for example, adhering to Uniform Corporate Governance Principles
such as those promulgated by the Commonwealth Association for Corporate Governance
(CACG). Furthermore, many rich and diverse cultures are to be found throughout the
Commonwealth countries. However, all have standard features, which means that consensus on
a global scale is more easily achieved than among equally diverse countries that do not enjoy
such commonalities. It is in this regard that the CACG is better placed to harness the unique
characteristic of “commonwealthness” to facilitate the communication and promotion of gender
diversity on corporate boards amongst various nations across the globe, and particularly within
Anglophone sub-Saharan African countries whose cultural history is inclined towards masculinity,
and as such, their corporates are not pro-gender diversity. Even in countries where the political
history has encouraged diversity and a more equal role for women on corporate boards such as
South Africa, the practice of female representation on corporate boards is still plagued with
tokenism (Sotola, 2019). A study such as the current one would thus serve to give more impetus
for gender advocate institutions such as the CACG to advance their advocacy and policy
conversations on the topic of gender equality and equity on corporate boards of African firms.
This role of the Commonwealth is especially significant in the current process of globalisation (see
also Cumming et al., 2017). Besides, the findings of the current study would serve to strengthen
reform efforts aimed at creating a culture that is pro-gender diversity within sub-Saharan Africa.
It has long been observed that, while some African economies have moved further ahead
than others in adopting some policies or programs to address the paucity of women in the
ranks of corporate decision makers, there are still far too many who have yet to realise that
this is even an issue (Navitidad, 2015). There is a general lack of commitment to women
empowerment in Africa as observed by the survey of the African Development Bank (AfDB)
reported by Navitidad (2015). Many also commented on the lack of regional information
even on the arena of women in the private sector, let alone women in senior management
and corporate directorship. The report notes that, before any strategy is undertaken to
improve women’s access to corporate leadership, data needs to be provided to see
precisely the current status of women in these positions. Statistics reported by the AfDB
survey relating to women on corporate boards in Africa show that Kenya has the highest
percentage of women directors on corporate boards with 19.8%. South Africa, Botswana,
Zambia and Ghana follow with above-average percentages of 17.4%, 16.9%, 15.9% and
15.7%, respectively. Cote d’Ivoire has the lowest percentage (5.1%), while the three North
African countries of Egypt (8.2%), Tunisia (7.9%) and Morocco (5.9%) had slightly higher
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percentages. Tanzania (14.3%), Uganda (12.9%) and Nigeria (11.5%) hover around the
continental average of 12.7%. The report acknowledged certain key barriers to women
integration into corporate boards in Africa comprising:

 the informal process of making board appointments that are largely based on the
proverbial “old boy” networks, fed by family, clan, school and business relations;

 the lack of understanding of the necessity and benefits of a diverse board;

 infantile CG systems without transparent nomination processes; and

 weak regulatory enforcement of current guidelines that often render applying additional
regulations difficult.
In view of these challenges, the AfDB study makes recommendations for baseline research
on the status and contribution of women on boards, as well as incorporating gender quotas
on corporate listing requirements, coupled with having mandates for women directors as
part of corporate strategy. The current study seeks to make a contribution in the line of
baseline research which highlights an essential role that women on corporate boards in
Africa play with respect to EM monitoring towards firm performance enhancements, as part
of the advocacy for diversity on corporate boards.
3. Theoretical literature review
Conceptually, EM may be defined as the process of taking deliberate steps within the
constraints of generally accepted accounting principles to bring about the desired level of
reported earnings (Davidson et al., 1988). EM may be opportunistic or firm value enhancing
depending on how managers use it (Rezaei and Roshani, 2012). The agency theory by
Jensen and Meckling (1976) underscores the essential role of effective CG systems
(Proimos, 2005) in mitigating agency problems such as opportunistic EM (Krishnan, 2003;
Shen and Chih, 2007; Cornett et al., 2009) or managerial mischief (Nyberg et al., 2010)
arising from the separation of ownership and control. The monitoring role of CG actors such
as females on the board, independent commissioners and good external auditors have
been noted to constrain fraudulent actions by companies such as opportunistic EM, which
results in favourable performance consequences (Mahrani and Soewarno, 2018). Krishnan
(2003) observed that CG mechanisms play a crucial role in constraining opportunistic EM
and influencing the type of EM used. CG mechanisms, and particularly, gender diversity,
thus play an important role in investigations of EM and its attendant effect on firm
performance.
Theoretically, female representation on corporate boards has been argued to bring balance
in perspectives in decision-making in the boardroom, provide effective monitoring on board
governance, curb opportunistic behaviour and improve corporate performance both in the
private (Khidmat et al., 2022) and public sectors (Abanga et al., 2022). Catalyst (2004)
argues that firms with gender-diverse boards produce better financial results. Diversity in
skills, knowledge and experience is recognised as a prerequisite for better decision-
making, which ultimately affects a firm’s “bottom-line” favourably. The mechanism or
conduit via which board gender diversity could affect firm performance may also be
through its EM monitoring (Low et al., 2015; Zalata et al., 2021).
Board gender diversity can be supported by using various theoretical perspectives. The
critical mass theory indicates that when a sub-group of people (in this case, females on the
board) reaches a certain critical mass in terms of size, then, that is when that sub-group
may be able to affect the decisions of the group as a whole (Torchia et al., 2011). Women
on corporate boards can be divided into four common groups based on the work of Kanter
(1977) as follows: uniform groups (0% women), skewed groups (up to 20% women), tilted
groups (20%–40% women) and balanced groups (40%–60% women). The “critical mass” of
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women directors has generally been measured based on the number of women on boards
(at least three female board members) (Torchia et al., 2011) or the percentage (about 30%
of women on boards) (Joecks et al., 2013). Some studies such as Kristie (2011) and Liu
et al. (2014) have suggested under critical mass theory that, having one female member on
a corporate board may be considered as “a token”, having two female members on the
board may be considered as “presence” and having three female members on a corporate
board may be considered as “voice”. This implies that under the critical mass theory
perspective, women on corporate boards can have a positive impact on firm performance
only if there is a sufficient number of women on boards such that they can have real
influence on board decisions (Torchia et al., 2011). Studies supporting the critical mass
theory (Torchia et al., 2011) find that the relationship between women on boards and
accounting performance has changed from negative to positive in firms that have increased
their women on boards proportion from below to equal or more than 30% (Arena et al.,
2015; Elmagrhi et al., 2018; Joecks et al., 2013; Wiley and Monllor-Tormos, 2018; Gharbi
and Othmani, 2022). It is worth noting, however, that the critical mass of women on
corporate boards for a positive impact on corporate outcomes is still an ongoing theoretical
and empirical debate because existing studies from different contexts have shown different
results, such as critical mass being 20% rather than 30% (Gröschl and Arcot, 2014). Interestingly,
no African country, not even Kenya which has the highest women representation on its corporate
boards (i.e. 19.8%), meets the baseline critical mass threshold of 20% advanced in the literature.
Besides the critical mass theory, several other theories have been used to explain women
on corporate boards. According to agency theory, the board is entrusted with the
monitoring of management actions to reduce agency problems (Finegold et al., 2007;
Reguera-Alvarado et al., 2017). Female directors add another facet to the oversight lens
because the diversity of backgrounds is argued to increase effectiveness in monitoring
(Low et al., 2015). The effectiveness in the monitoring abilities of a gender-diverse board is
expected to limit or moderate EM practices and translate to enhanced performance. On the
other hand, other studies (Carter et al., 2010; Chapple and Humphrey, 2014) show that
agency theory does not directly support the view that women on boards can necessarily
have a positive effect on corporate outcomes. Thus, women on boards may have a positive,
negative or even no effect on firm performance (Labelle et al., 2015; Marinova et al., 2016).
Stakeholder theory suggests that the board should look after the interests of not only the
shareholders but also other stakeholders, for example, customers, employees, suppliers
and other parties that are of importance to the firm (Finegold et al., 2007). Female directors
exhibit increased sensitivity to social and environmental concerns, and it is, therefore,
expected that firms will perform better in these areas, which will increase the firms’
reputation (Finegold, 2007). Moreover, resource dependence theory argues that female
directors on boards tend to enhance board human and relational capital, and provide better
understanding especially about female consumer markets, as well as wider and sustained
ties with external parties (Carter et al., 2003; Hillman and Dalziel, 2003). Besides, legitimacy
theory suggests that by adopting more gender-diverse boards, firms can respond to the
pressures from institutional investors and labour markets, and attain increased legitimacy and
business advantages (Singh et al., 2007). This, in turn, can strengthen firm performance. Lastly,
from a behavioural theoretical perspective, prior studies indicate that female directors are more
sensitive to ethical issues (Bernardi and Arnold, 1997) and exhibit greater risk aversion (Sunden
and Surette, 1998) and have better board meetings attendance record (Adams and Ferreira,
2009) than male directors. Female board participation is likely to create formal and informal
discussions between board of directors and results in greater accountability for managerial
decisions (Adams and Ferreira, 2009). Further, female board participation can assist boards to
benefit from a wide pool of talent by bringing different skills and experiences into the boardroom,
including soft, but intelligent feminine beliefs, emotions, experiences, feelings and values
(Elghuweel et al., 2017). Thus, this can improve the boards’ professionalism in evaluating firms’
financial reports and detecting any financial reporting irregularities (Pfeffer, 1972; Nielsen and
j CORPORATE GOVERNANCE j
Huse, 2010). Arguably, a mix of male and female non-executive directors on a board may not
only help in improving managerial monitoring as inherent in the rational agency theoretical
perspective, but also in reaching better satisficing decisions by bringing stronger emotional
intelligence into the corporate board decision-making process and thereby potential minimising
incidences of EM (Adams and Ferreira, 2009; Srinidhi et al., 2011; Elghuweel, 2017).
4. Empirical literature review and hypothesis development
4.1 Earnings management and firm performance
It has long been established by prior research that EM is related with firm financial
performance. The agency and positive accounting theories have often been used to explain
the incentive for EM practices by firms, which also demonstrates its association with firm
performance. The examination of the relationship between EM and firms’ performance has
continued to be an ongoing debate in recent times (Gill et al., 2013; Debnath, 2017;
Chakroun and Amar, 2022) owing to investors demand for credibility in corporate financial
reports as well as the quest to prevent future accounting scandals which resulted in the last
financial crises of 2007/2008. The empirical evidence on the EM–performance relationship,
however, presents mixed results. Chakroun and Amar (2022) in consonance with Gill et al.
(2013) find that EM is negatively related to firm performance as measured by ROAs. The
findings of Ardekani et al. (2012), who investigated the association between acquisition EM
and firm’s performance in Malaysian firms during 2004–2010, show EM activities to be
negatively correlated with firm’s financial performance after the acquisition date for share
acquirer firms. On the other hand, positive linkages between EM and firms’ performance have
been documented by other studies. For example, Lee et al. (2016) from a sample of 67 non-
financial firms studied over a period of 1988 to 2001 show that, managed earnings positively
affected a firm’s performance and growth. Kasznik (1999) in tandem with Dechow et al. (1995)
demonstrate that discretionary accruals (DAs) are positively correlated with firm performance.
Recently, Mangala and Dhanda (2019), who investigated EM and performance of IPOs in
India, demonstrated that post-issue performance of Indian initial public offering firms is a
derivation of issue year EM. Furthermore, Hernawati et al. (2021) reported that Indonesian
manufacturing firms that go public use income-increasing EM strategy to transfer potential
welfare from the company to stakeholders. Traditionally, the causal relationship between EM
and firm performance predicted by agency theory implies that the causality should run from
EM to firm performance, although some other studies have challenged this relationship (Watts
and Zimmerman, 1978; Alexander and Hengky, 2017; Sari et al., 2021). The empirical
evidence also demonstrates that EM may be endogenously determined by the profit-
maximisation process (Tang and Chang, 2013), as well as observable and unobservable firm
characteristics. This suggests that endogeneity is an issue that needs to be considered in
investigations of the EM–firm performance relationship. Given that both EM and performance
are simultaneously determined in a system in which performance goal is a component,
variations in EM should not be systematically related to variations in firm performance. In other
words, EM should be unrelated to firm performance when endogeneity which stems from
simultaneity and unobserved heterogeneity exists. Besides, another source of endogeneity,
namely, dynamic endogeneity, can be observed with studies in the EM–performance
relationship (Kumar et al., 2021; Ndu et al., 2019) and in CG–performance relationship in
general (Wintoki et al., 2012). Based on the confliction of theoretical predictions regarding the
EM and CG–performance relationship, coupled with inconclusive empirical arguments, we
propose from a dynamic perspective a significant link between EM and performance, but do
not determine any particular direction for this relationship. Our first hypothesis is thus
formulated as follows:
H1. EM is significantly related with firm financial performance in sub-Saharan Africa.
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4.2 Board gender diversity and firm performance
A key assumption underlying the “business/economic” case for the global push for the
inclusion of more women on corporate boards is that women are systematically (e.g.
behaviourally, cognitively, physiologically and psychologically) different from men (Adams
and Funk, 2012; Zalata et al., 2019a). In particular, researchers have identified two main
factors that might drive the different business behaviour among women and men, namely,
attributes relating to their ethical stands and risk preferences (Croson and Gneezy, 2009;
Palvia et al., 2015). Thus, women may bring diverse/new beliefs, experiences, perspectives,
values and work ethic that may enhance board decision-making and effectiveness. Such
attributes can ultimately enhance governance structures and corporate outcomes
(Brinkhuis and Scholtens, 2018).
Firm strategy and behaviours have been noted to have a strong relationship with corporate
financial performance (e.g. Artz et al., 2010; Dechow, 1994; Kreiser and Davis, 2010; Lee
and Jungbae Roh, 2012; Siegel and Simons, 2010). Researchers investigating the
association between women on corporate boards and firm performance appear to follow
two main approaches. The first approach is to compare the financial performance of firms
that are mainly managed by men and firms that are primarily managed by women. The
second approach is to directly test the impact of women on boards on firm performance.
First of all, some studies find no difference in profit margin, employment growth, sales,
service quality and return on portfolio between male and female directors (e.g. Ali and
Shabir, 2017; Atkinson et al., 2003; Bardasi et al., 2011; Chirwa, 2008; Ellwood and
GarciaLacalle, 2015; Lee et al., 2016). Fewer studies show that women on boards usually
engage less in risk-taking, EM and mergers and acquisitions (e.g. Belot and Serve, 2018;
Farag and Mallin, 2016; Huang and Kisgen, 2013; Iqbal et al., 2006; Yordanova and
Alexandrova-Boshnakova, 2011). In this vein, Gottschalk and Niefert (2013) found that in the
context of Germany, female-founded firms sell a small number of products, and have slower
employment growth and lower return on sales because of their less professional experience
compared with male-founded firms. However, women executives generate better firm
performance than their male counterparts do when they work in the hospitality industry (del
Mar Alonso-Almeida, 2012; Marco, 2012) or family business (Bjuggren et al., 2018). A great
number of studies only focus on the second trend of researching the relationship between
female directors and firm performance. This relationship is inconclusive because of mixed
findings such as positive, negative, non-linear or no relationship. Studies that report of a
positive association between gender diversity and firm performance explain it in terms of
women having greater analytical skills and their ability to coordinate activities with much
greater ease than men while upholding company values and strategy (Heskett, 2015; Ali
et al., 2021; Meah et al., 2021; Simeonescu et al., 2021; Nyeadi et al., 2021; Awan and
Raza, 2022). Those that report of negative or insignificant relationship between gender
diversity and firm performance mostly adduce it to the “reduced powers of female directors
on corporate boards”, for example, by not making them serve on any advisory or monitoring
committees (Zalata et al., 2019b), which often culminates in a weaker monitoring and
advisory role (Alshirah et al., 2022; Post and Byron, 2014; Vuong, 2021; Simeonescu, 2021).
Besides, studies thta report of nonlinear or threshold effects (Gharbi and Othmani, 2022)
often support the critical mass theory, which posits that a sufficient number of women on
boards are required so that they can have real influence on board decisions and
consequently affect corporate outcomes favourably (Torchia et al., 2011; Gharbi and
Othmani, 2022). It stands to reason that, without a sufficient number or proportion of women
on corporate boards, their influence on corporate outcomes may be negligible or even
adverse. In spite of the contrasting evidences, prior studies generally acknowledge that
gender diversity seems to have some correlation with firm financial performance. Against
this backdrop, and from the perspective of the agency theory, the current study tests the
following hypothesis:
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H2. Board gender diversity is significantly correlated with firm financial performance in
sub-Saharan Africa.
4.3 Earnings management and firm performance: the moderating role of board
gender diversity
Prior studies from the behavioural theoretical perspective have indicated that female
directors are more sensitive to ethical issues (Bernardi and Arnold, 1997) and exhibit
greater risk aversion (Sunden and Surette, 1998) and have better board meetings
attendance record (Adams and Ferreira, 2009) than male directors. Female board
participation is likely to create formal and informal discussions between board of directors
and result in greater accountability for managerial decisions (Adams and Ferreira, 2009).
Further, it has been argued that female board participation can assist boards to benefit from
a wide pool of talent by bringing different skills and experiences into the boardroom,
including soft, but intelligent feminine beliefs, emotions, experiences, feelings and values.
Thus, this can improve the boards’ professionalism in evaluating firms’ financial reports and
detecting any financial reporting irregularities (Pfeffer, 1972; Nielsen and Huse, 2010).
Arguably, a mix of male and female non-executive directors on a board may not only help in
improving managerial monitoring as inherent in the rational agency theoretical perspective,
but also in reaching better satisficing decisions by bringing stronger emotional intelligence
into the corporate board decision-making process and thereby potentially minimising
incidences of EM (Adams and Ferreira, 2009; Srinidhi et al., 2011).
The current study, following the agency theoretical perspective, intimates that board gender
diversity would significantly moderate EM, and consequently, enhance the profitability of firms.
Ullah et al. (2020) have earlier noted that board diversity disciplines management reduces
agency conflicts and thereby improves CG, resulting in higher efficiency. Orazalin (2020) also
showed that board gender diversity effectively constrains EM in Kazakhstan. Boadi et al.
(2022), whose study supports pro-gender diversity on boards, demonstrate that greater
boardroom gender diversity generates technical efficiencies for banks in Ghana. Li et al.
(2022) also found that board gender diversity is associated with lower firm risk worldwide. The
results of Guizani and Abdalkrim (2022) also show that board gender diversity could help to
improve board effectiveness by preventing corporations from being too exposed to financial
distress and bankruptcy. Dakhli (2022) further indicated that the presence of women in
corporate boardrooms negatively affects tax avoidance, which is a tool for managing earnings.
From the foregoing, it is apparent that board gender diversity plays a role in the EM–firm
performance nexus.
From a dynamic framework using the system generalised method of moments (SGMMs)
estimation approach, Karim et al. (2021) observed the moderating role of gender diversity on the
relationship between ownership structure and corporate sustainable performance in Malysia but
not in Pakistan. They therefore suggested for reforms in CG structures in Pakistan where weak
economic conditions leave a frail impact of ownership structure on corporate sustainable
performance and an insignificant moderating impact of board gender diversity. Nadeem et al.
(2019) revealed a negative relationship between women on boards and firm risk, but a positive
impact of women on boards and firm risk on profitability. The study further reported a positive
significant impact of women on boards on observable dynamics of the board, thus supporting
the group dynamics mechanism through which women on boards may reduce risk but improve
profitability, and hence nullifying the stereotypical misconception of women as generally being
risk averse (Li et al., 2022; Ozdemir and Erkmen, 2022). Janssen (2019) also demonstrated in
his thesis how EM and gender diversity complement in explaining firm performance, in that, EM
mediates as well as moderates the relationship between gender diversity and performance of
firms sampled from ten countries of the European Economic Area without a gender quota.
Proença et al. (2020) also showed that the differentiating characteristics of women
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such as greater ethical concern and risk aversion help mitigate the adverse effects of
personal agendas.
Vuong (2021) also argued that mere women’s representation on boards encourages
more EM in Vietnam. By contrast, she demonstrates that women occupying chair
positions on boards are associated with less EM. The author reasoned that, the
mere presence of women on boards without clearly defined leading roles could
likely lead to weaker EM monitoring. This is corroborated by the arguments advanced
by Zalata et al. (2019b) that, when female directors are not made to directly
serve or take centre stage on advisory or monitoring sub-committees of the board
of directors, they are unable to exhibit their superior monitoring abilities on
executive management to influence performance outcomes. Therefore, Vuong (2021)
suggested that policies and reforms emphasise the promotion of women to leading
positions such as chairwomen instead of merely putting pressure on increasing the
number of women in the boardroom, as this may be counterproductive and weaken
firm performance. Zalata et al. (2021) also demonstrated that female directors
possessing relevant financial background and having fewer outside directorships
are able to mitigate EM, and therefore, overcommitting expert female directors
with more outside directorships would diminish their monitoring ability. The authors
found no evidence that female directors without relevant financial background are
able to mitigate EM irrespective of their outside directorships or tenure. The current
study submits that an examination of EM and its association with performance would
be incomplete without the presence of CG variable(s), particularly board gender
diversity. EM seems to be practised within the implicit bounds of CG systems
and structures. Poor or weak CG structures allow managers wanton discretion in
exercising their stewardship responsibilities. This often leads to unacceptable
practices, including EM which makes firms unattractive for investment. However,
excellent and robust CG structures that include gender-diverse boards are expected
to limit EM practices and subsequently enhance the credibility and profitability of
firms (Tang and Chang, 2013). Based on the arguments mentioned above and with
the dynamic endogeneity in mind, we propose our third hypothesis as follows:
H3. The relationship between EM and financial performance of firms is moderated by
board gender diversity in sub-Saharan Africa.
5. Research design
A sample is drawn from listed non-financial firms in nine Stock Exchanges within sub-
Saharan Africa. Following previous studies (Dittmar and Mahrt-Smith, 2007; Schultz et al.,
2010), we exclude insurance companies and banks from our sample because financial
firms are very different in many respects from non-financial firms, and the choice of a
suitable EM model adopted for non-financial firms may not be appropriate for financial
firms. The choice of the study’s final sample was guided by the availability and adequacy of
firms’ audited annual reports and corresponding financial data sourced from the databases
of African Financials and Machame Ratios covering a period of 13 years from 2007 to 2019.
Table 1 presents how the final sample selection was arrived at.
The audited annual reports data on listed firms sourced from AfricanFinancials and
MachameRatios databases were converted into a panel data set for analysis. Data on
firm-level CG mechanisms were hand-collected from firms’ annual reports using
respective country codes as well as the CACG CG principles as guides, because all
the countries from which the sampled firms were sourced happen to be Anglophone,
and belong to the British Commonwealth of States. As such, these share common
characteristics that allow them to be targeted for a study such as this. The variables
used in the study’s analysis have been explained under the sub-sections of Section
5.1, and also summarised in Table 2.
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Table 1 Sample selection
No. of firms with annual
No. of firms whose missing annual reports data deemed
No. of non-financial firms whose reports data were deemed adequate
annual reports data were sourced No. of firms with inadequate (i.e. having less than (i.e. covering more than
from AfricanFinancials and missing annual half of the annual reports data half of the study period)
Country of MachameRatios databases for the reports data over covering the study period), hence and therefore retained
sampled firms study period the study period excluded from the sample in the study sample
Ghana 5 0 0 5
Kenya 11 3 0 11
Malawi 2 2 0 2
Mauritius 5 3 0 5
Nigeria 40 8 2 38
Namibia 2 2 0 2
South Africa 35 13 0 35
Tanzania 3 0 0 3
Zambia 4 2 0 4
Total 107 33 2 105
Source: Authors’ compilation of annual reports from AfricanFinancials and MachameRatios websites
5.1 Description of study variables
5.1.1 Dependent variable: firm performance. Performance may be conceived and measured
in several ways for different organisations such as ROA, return on equity and Tobin’s Q.
Performance, however, refers to how well a firm has generated returns or value for its finance
providers and other stakeholders. This research uses ROA as a measure of performance.
ROA measures the competitiveness of the company and the efficiency of management. The
current study uses ROA as its measure of financial performance, similar to other studies
conducted (Bhagat and Bolton, 2008; Farooqi et al., 2014; Sow and Tozo, 2019; Lin and Fu,
2017; Pham et al., 2015; Zhou et al., 2017). ROA was computed as follows:
ROAi;t ¼ EBITi;t=TAi;t
where EBITi,t refers to profit before interest and tax for firm (i) in year (t), and TAi,t also refers
to total assets for firm (i) in year (t).
Firm performance is a key variable having an association with EM. Gunawan et al. (2015)
intimate that managers will undertake EM to show the best performance of their company.
This suggests that, to make the firm more attractive, managers tend to manage their firm’s
earnings upwardly (Kothari et al., 2005; Machuga and Teitel, 2007). Managers of a stable
profit-making company would have little need to modify their earnings. Studies such as Ali
et al. (2015) and Debnath (2017) report that EM affects company performance negatively.
Besides, Sow and Tozo (2019) found mixed evidence of different CG mechanisms affecting
firm performance, with CEO duality and board size having a negative effect on performance,
whereas board independence had a positive effect on performance. Other authors, such as
Wallison (2006), who found a negative effect of board independence on performance, argue
that having independent directors on the board is for better governance instead of better
performance. The literature on the association between EM and firm performance reports
mixed shreds of evidence; hence, the issue is still deemed an open question.
5.1.2 Independent variable: earnings management measured via discretionary accruals.
Khan (2012) explains DA as a non-mandatory expense or asset recorded within the
accounting system that has yet to be realised. An example is an anticipated bonus for
management. Using the raw accruals amounts as a proxy for EM is a simple method to
evaluate earnings quality because firms can have high accruals for legitimate business
reasons such as sales growth. A more complicated proxy can be created by attempting to
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Table 2 Measurement of variables used in the study’s models
Expected
Variable Scale Source sign
Dependent variable: This is measured by ROAi,t = EBITi,t /TAi,t Annual reports of
ROA where: firms
Return on assets EBITi,t = profit before interest and tax for firm i in year t; and
(proxy for firm-performance/ TAi,t = total assets for firm i in year t
profitability)
Independent variables: This is measured using the Pae (2005) discretionary accrual’s model; Annual reports of þ/
DA NAt = a11/At1þ a2DRevt /At1 þ a3PPEt /At1 þ a4CFOt /At1þ a5 firms
Discretionary accruals CFOt1/At1
(proxy for earnings where:
management) At1 = total assets in year t 1;
DRevt = the change in revenues from the preceding year;
PPEt = the gross value of property, plant and equipment in year t;
CFOt = operating cashflows in year t;
CFOt1 = operating cashflows in year t 1; and
a1, a2, a3, a4, a5 = firm-specific parameters
Estimates of the firm specific parameters are done via the model:
TAt /At1 = a11/At1þ a2DRevt /At1þ a3PPEt /At1þ a4CFOt /At1þ
a5 CFOt1/At1 þ«t
where:
Total accruals (TAs) is defined as income before extraordinary items
and discontinued operations minus operating cash flows, that is, TAt =
NOPIt  CFOt
«t is discretionary accruals (DAs) in year t
BGENDIV This is measured as the proportion of female directors on the board to Annual reports of þ/
Gender diversity the total size of the board. It has been represented in both logarithmic firms
form and original ratio form for analysis
Control variables
BSIZE This is measured as the total number of directors on the board Annual reports of þ/
Board size firms
BREM This is measured as annual total directors’ emoluments scaled by total Annual reports of þ/
Board remuneration sales for firm i in year t firms
BINDE This is measured as proportion of non-executive directors on the board Annual reports of þ/
Board independence to the total board size. It has been represented in logarithmic form firms
BMEET This is measured as the number of times the board meets in a year Annual reports of þ/
Board meetings firms
OWNCON This is measured as the proportion of shares owned by the largest Annual reports of þ/
Ownership concentration block shareholder for firm i in year t. It has been represented in firms
logarithmic form
AUDQ This is a dummy variable measured as 1 where a firm has engaged one Annual reports of þ/
Audit quality of the big-4 audit firms or 0 otherwise firms
LEV This is measured by the total liabilities to total assets. It is represented Annual reports of –
Leverage in logarithm form firms
SIZE This is measured as the logarithm of a firm’s total assets Annual reports of þ
Firm size firms
GRWTH This is measured as the price-to-book ratio for firm i in year t Annual reports of þ
Growth opportunities firms
AGE The is measured as the age of a firm from the date of listing on the Annual reports of þ
Age of firm stock market to the end of the sample period. It is represented in firms
logarithm form
«i,t Error term The error term
Source: Authors’ compilation (2022)
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categorise total accruals (TAs) into nondiscretionary (NDA) and discretionary (DA)
accruals. The nondiscretionary component reflects business conditions such as growth and
length of the operating cycle that naturally destroy accruals, while the discretionary part
identifies management choices (Keefe, 2013). The result of pulling DA amounts from the TA
amounts is a metric that reflects accruals because of management’s choice alone. Thus,
there appears to be no business reason for these accruals; hence, DA is a better proxy for
EM. Of the several aggregate accruals proxies advanced in the literature for measuring EM,
the current study settles on the Pae’s (2005) model of DA. Pae (2005) extends the widely
used Jones model by adding either lagged TAs or cashflows, or lagged cashflows and
lagged TAs based on the fact that accruals are negatively correlated with current cashflow
from operations (CFOs), but positively correlated with lagged CFOs (Dechow, 1994;
Dechow and Dichev, 2002). Further, Pae (2005) makes the same adjustments to the
modified Jones model. His empirical results prove that the inclusion of the current and lagged
CFOs significantly improves the explanatory power of the Jones model. There is, however, no
qualitative difference between the Pae model and the Jones or modified Jones model in the
demonstrated explanatory power of the added items. That notwithstanding, the present study
adopts the Pae (2005) model of DA as suitable for the characteristics of the study’s sample
data. The following Pae (2005) model for TAs was specified for the present study:
TAt ¼ a11=At1 þ a2DRevt=At1 þ a3PPEt=At1 þ a4CFOt=At1 þ a5CFOt1=At1 þ «t
(1)
Whereas the non-DAs component is specified by the following model:
NDAt ¼ a11=At1 þ a2DRevt=At1 þ a3PPEt=At1 þ a4CFOt=At1 þ a5CFOt1=At1 (2)
where TAt is total accruals calculated as net operating income (NOPI) minus cashflows from
operations for each year t (i.e. TAt = NOPIt – CFOt); NDAt is the non-discretionary accruals for
each year t; CFOt(t  1) is cashflows from operations for each year t, or (t  1); DRevt is the
changes in the revenue (from credit sales) for each year t; PPEt is the property, plant and
equipment for each year t; At1 is the total assets at the end of period (t  1); «t is the random
error, which is used as the estimate for DA (i.e. DAs which are ordinarily calculated as TAs
minus non-DAs). The coefficients a1, a2 and a3 are estimates of firm-specific parameters a1,
a2 and a3, respectively, through ordinary least squares (OLS) regression from equation (1).
The causal effects and relationships between EM and profitability or between CG and
profitability have been studied extensively in the literature both theoretically and empirically.
While some studies such as Fang (2008) and Ngunjiri (2017) found positive effects of EM on
firms’ profitability, others such as Alhadad and Al-Own (2017), Amarjit et al. (2013), Chakroun
and Amar, (2022), Debnath (2017) and Gong et al. (2008) found a negative effect of EM on the
profitability of firms. However, some other studies found mixed or insignificant results (Lee et al.,
2016; Moshi, 2016). Concerning CG, EM and performance relationship, Abbadi et al. (2016)
reported that EM is negatively affected by overall CGQ index categories in Jordan. Ashfaq et al.
(2017) also reported that the CG index has a significant positive impact on firms’ performance
for conventional and Islamic financial institutions. Their findings indicate that, as CGQ improves,
its ability to constrain EM also improves, leading to performance enhancements in firms. Overall,
the results of prior studies regarding the association between EM, CG and performance appear
inconclusive and thus lend themselves for further studies in this area.
5.1.3 Moderating variable: board gender diversity. Board gender diversity refers to the
proportion of the board size that is represented by females. Diversity has been advocated
from several theoretical perspectives, including the agency theory (Finegold et al., 2007;
Low et al., 2015), critical mass theory (Torchia et al., 2011; Gharbi and Othmani, 2022),
stakeholder theory (Finegold et al., 2007), resource dependence theory (Carter et al., 2003;
Hillman and Dalziel, 2003), legitimacy theory (Singh et al., 2007) and behavioural theory
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(Bernardi and Arnold, 1997; Adams and Ferreira, 2009). Generally, diversified firms have
been argued to produce better financial results (Catalyst, 2004). However, empirical studies
regarding the contribution of female directors to corporate outcomes are still producing
mixed evidences with plausible reasons adduced for each study’s findings. The current
study therefore seeks to contribute to the empirical debate by providing fresh evidence
from an emerging African context, a context which is not pro-diversity and has its policy
conversations on gender diversity on boards often rife with tokenism.
5.1.4 Control variables. Aside board gender diversity, other CG variables representing
board characteristics that have been controlled in the study’s estimation include board size,
board remuneration, board independence, board meetings, ownership concentration and
audit quality. Furthermore, firm size (Zhou et al., 2017), growth opportunities (Kothari et al.,
2002), leverage (Pham et al., 2015) and listing tenure (Lin and Fu, 2017) have also been
controlled for in the study’s estimations in line with recommendations from the literature. The
measures for these variables are summarised in Table 2.
5.2 Model specification
The study specifies an AR(1) panel model which recognises the dynamic nature of the EM
cum CG–performance relationship by including a one-year lagged ROA variable as an
additional explanatory variable to capture the influence of the past on the current
realisations of performance (Dezsö and Ross, 2012; Munisi and Randøy, 2013; Ndu et al.,
2019; Nguyen et al., 2014, 2015a). This is in line with the argument of Zhou et al. (2014) that,
given the limitation of the time dimension in corporate finance panel data sets, an AR(1)
panel model seems to be unavoidable in almost all empirical corporate finance studies.
Using the measures of EM and CG mechanisms together with other firm-level
characteristics controlled for, the study specifies the following model for empirical
investigation using Stata Version 15 as the analysis tool:
ROAit ¼ a0 þ a1ROAit1 þ a2DAit þ a3BSIZEit þ a4BINDEit þ a5BMEETit
þa6AUDQit þ a7OWNCONit þ a8BGENDIVit þ a9BGENDIV#DAit
þa10LEVit þ a11GRWTHit þ a12AGEit þ t þ mt þ ht þ «it (3)
where firm i in year t, ROA is a proxy for financial performance; a0 is the constant; and a1 to
a12 are unknown estimated coefficients; DA is discretionary accruals; the proxy for EM, BSIZE
is board size, BINDE is board independence, BMEET is board meetings, AUDQ is audit
quality, OWNCON is ownership concentration, BGENDIV is board gender diversity, LEV is firm
leverage, GRWTH is firm growth and AGE is firm age. The model also controls for unobserved
country heterogeneity (vt), firm-fixed effects (mt) as well as time-specific effects (ht) that are
time-variant and common to all companies such as the effects of inflation rates, GDP growth,
market fluctuations or other macroeconomic conditions. And finally, «it represents the classical
error term which is assumed to be independent and identically distributed.
5.3 Estimation approach
One of the most documented problematic issues in corporate finance and governance
literature relates to the credibility of causal inferences about the relationship between firm-
specific financial as well as governance characteristics and performance (Brown et al.,
2011). Recognising that the endogenous determination as well as the dynamic correlation
between current EM-cum-CG structures with past performance has been documented by
previous research (Wintoki et al., 2012), a regression of performance variable on EM
variable in which CG variable(s) are controlled should be examined in a dynamic framework
as displayed in equation (3). Moreover, it is necessary to consider a suitable estimation
strategy which is capable of dealing with biases that stem from the presence of the AR(1)
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structure and endogenous explanatory variable(s) in equation (3). Consequently, the
current study uses the SGMMs by Blundell and Bond (1998), which is acclaimed capable of
dealing with most of the endogeneity issues that arise from estimations of models such as
the one in the current study. The Blundell–Bond estimator is justified as well suited for the
characteristics of this study’s data set, namely:

 an unbalanced panel with short to moderate length (T = 13) and larger sample size
(N = 105);

 CG considered endogenous;

 CG-cum-EM–performance relationship is, by nature, dynamic; and

 financial performance may be driven by individual fixed effects which are unobservable.
Simulation analyses undertaken by Flannery and Hankins (2013) and Zhou et al. (2014)
further demonstrate that the Blundell–Bond SGMM emerges as the best-performing
estimator across the data sets with conditions as mentioned above. This econometric
technique has also been used in several CG as well as EM studies (Meah et al., 2021; Karim
et al., 2021; Munisi and Randøy, 2013; Ndu et al., 2019; Nguyen et al., 2014, 2015a; Wintoki
et al., 2012). The two-step SGMM technique involves a system of equations in different
levels, allowing the authors to treat all or some of the explanatory variables in equation (4)
as endogenous (see also, Baum et al., 2007). As such, all the explanatory variables except
firm age were considered endogenous. We also used a finite-sample robust corrected
estimate of variance, suggested by Windmeijer (2005), to consider the concern of Blundell
and Bond (1998) about the downward-biased tendency of resistive standard errors
estimated by the two-step SGMM approach for small samples. Finally, we tested for
instrument validity or over-identification of our SGMM model using the Hansen-J test of
over-identification, which proved that our model was over-identified and hence well
specified. This finding was also supported by the Difference-in-Hansen test of exogeneity of
instrument subsets, which showed that the instruments used in our estimations were
exogenous. To check the robustness of our findings across different econometric estimation
techniques and to facilitate comparison of our findings with those of prior relevant studies, the
pooled OLS and the fixed-effects (FEs; within-groups) estimators were also applied to the study’s
data set. Our estimation practice is in line with the suggestion of Bond (2002) that the consistent
SGMM estimator should be compared with simpler estimators such as the OLS and FEs
estimators to detect potential biases in empirical results as well as to ensure dynamic stability
(Nickell, 1981). For additional robustness test, we applied the Prais Winston panel-corrected
standard errors (PCSEs) estimator which is feasible when the absolute value of the off-diagonal
elements of the Pesaran test is different from zero (in this case 0.313). Moreover, the PCSE
estimator demonstrates dynamic stability in that, its coefficient estimate of the lagged dependent
variable lies in between the FE (lower bound) and OLS (upper bound) estimates.
6. Empirical results and discussion
6.1 Descriptive statistics
Table 3 summarises the descriptive statistics for the study’s sample firms. The mean of ROA
is 6.03%, suggesting that the returns generated for all providers of finance of firms in sub-
Saharan Africa during the sample period are, on average, low relative to returns on
government securities in these countries. This reflects the poor capability of firms in
exploiting their resources to generate decent returns for investors. The average level of DAs
or the proportion of managed earnings for sampled firms was about 2.00%, suggesting that
EM practices of firms are relatively high within sub-Saharan Africa compared with those
reported by other developing economies (Tangs and Chang, 2013; Zimon et al., 2021). The
average size of sampled firms was 5.13 with a standard deviation of 0.80, whereas leverage
was 3.75 with a standard deviation of 0.78. The sampled firms showed high growth
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Table 3 Descriptive statistics
(1) (2) (3) (4) (5)
Variables N Mean SD Min Max
BSIZE 1,295 9.569 2.952 2 25
BGENDIV 1,295 12.86 12.35 0 71.43
BREM 1,295 0.791 1.328 0.00430 17.59
BMEET 1,295 4.669 1.342 2 13
AUDQ 1,295 0.731 0.443 0 1
SIZE 1,295 5.125 0.802 2.754 7.183
GRWTH 1,288 3.134 6.085 36.47 96.98
ROA 1,294 6.032 15.53 179.9 295.7
DA 1,295 0.0200 0.755 2.268 26.10
BINDE 1,286 4.215 0.250 2.659 4.605
OWNCON 1,285 3.462 0.664 1.609 4.554
BGENDIV(a) 861 2.837 0.495 1.715 4.269
AGE 1,295 2.887 0.887 0 4.331
LEV 1,295 3.387 0.853 1.927 4.575
Number of groups 97 97 97 97 97
Notes: This table reports descriptive statistics based on aggregate samples of which the sizes may
be various because of missing values. The variables are as defined in Table 1. For interpretation
purposes, the descriptive statistics are calculated on the basis of levels with the exception of AUDQ
which was computed from a dummy scale. BINDE, OWNCON, AGE, LEV SIZE and BGENDIV were
calculated on the basis of logarithmic form. The ROA, being the dependent variable in our model,
was not transformed but allowed to retain its original form for ease of interpretations because its
histogram distribution appears normal
opportunities represented by a mean price-to-book ratio of 3.13 with a standard deviation of
6.09, and ownership concentration for sampled firms is 3.462 indicating that a high
proportion of the sampled firms have concentrated ownership structures. The CG statistics
for sampled firms shows an average board size of approximately 10, board diversity of
2.88, board independence of 4.22, average annual board meeting days of 5 and about 73%
of sampled firms having engaged the services of one of the big-4 external audit firms.
The correlation diagnostics as presented in Table 4 show that, almost all the independent
variables included in the study’s models have a statistically significant correlation with the
dependent variable, which is likely to offer at least some evidence for the proposition that,
these independent variables interact with the performance variable. This evidence confirms
the necessity of including these independent variables in our empirical models to alleviate
potential bias caused by variable omission. Notably, the correlation coefficient between
ROA and its one-year lagged (L.ROA) is positive and statistically significant (0.47),
supporting the well-documented proposition that firm performance is path-dependent
(Bebchuk and Roe, 1999). Moreover, one-year L.ROA is significantly correlated with EM
and some of the other independent variables. Together, these findings tentatively reveal the
dynamic nature of the EM cum CG–firm performance relationship, which has important
implications for the choice of estimation method.
It is also evident from Table 4 that multicollinearity seems an unlikely problem in the study’s
empirical models as none of the correlation coefficients among the independent variables is
larger than the value of 0.80. As suggested by Damodar (2004), unless correlation
coefficients among regressors exceed the threshold of 0.80, multicollinearity will not be a
severe problem for multiple regression analysis. This is confirmed by the variance inflation
factors (VIFs) formally calculated to detect multi-collinearity among the study’s independent
variables. Chatterjee and Hadi (2012, p. 236) suggest that a value of VIF larger than 10 is
usually considered an indication of the presence of collinearity problems. Because all the
computed VIFs of the independent variables are within 1.02–2.09, multicollinearity is not
deemed an issue in the study’s regression analysis.
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Table 4 Pair-wise correlation coefficients
Variables (1) (2) (3) (4) (5) (6) (7)
(1) ROA 1.000
(2) L.ROA 0.472 (0.000) 1.000
(3) DA 0.545 (0.000) 0.053 (0.068) 1.000
(4) BREM 0.364 (0.000) 0.274 (0.000) 0.016 (0.567) 1.000
(5) BSIZE 0.036 (0.196) 0.020 (0.501) 0.042 (0.134) 0.149 (0.000) 1.000
(6) BINDE 0.017 (0.537) 0.013 (0.643) 0.054 (0.051) 0.045 (0.107) 0.171 (0.000) 1.000
(7) BMEET 0.079 (0.004) 0.052 (0.072) 0.014 (0.623) 0.055 (0.048) 0.180 (0.000) 0.149 (0.000) 1.000
(8) OWNCON 0.027 (0.331) 0.031 (0.290) 0.032 (0.254) 0.026 (0.354) 0.162 (0.000) 0.001 (0.959) 0.226 (0.000)
(9) AUDQ 0.146 (0.000) 0.162 (0.000) 0.025 (0.376) 0.214 (0.000) 0.203 (0.000) 0.127 (0.000) 0.153 (0.000)
(10) BGENDIV 0.108 (0.002) 0.038 (0.277) 0.009 (0.789) 0.039 (0.252) 0.138 (0.000) 0.045 (0.189) 0.118 (0.001)
(11) AGE 0.029 (0.299) 0.018 (0.529) 0.055 (0.046) 0.053 (0.057) 0.181 (0.000) 0.141 (0.000) 0.067 (0.016)
(12) LEV 0.058 (0.036) 0.071 (0.014) 0.017 (0.542) 0.030 (0.287) 0.077 (0.006) 0.060 (0.031) 0.119 (0.000)
(13) SIZE 0.161 (0.000) 0.172 (0.000) 0.007 (0.810) 0.452 (0.000) 0.542 (0.000) 0.169 (0.000) 0.276 (0.000)
(14) GRWTH 0.226 (0.000) 0.261 (0.000) 0.011 (0.700) 0.094 (0.001) 0.042 (0.130) 0.117 (0.000) 0.080 (0.004)
Notes: This table presents pair-wise correlation coefficients which are based on samples of which the sizes may be various because of missing values. The variables are as defined
in Table 1. Asterisks indicate significance at 10 (), 5 () and 1% ()
(continued)
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Table 4
Variables (8) (9) (10) (11) (12) (13) (14)
(1) ROA
(2) L.ROA
(3) DA
(4) BREM
(5) BSIZE
(6) BINDE
(7) BMEET
(8) OWNCON 1.000
(9) AUDQ 0.145 (0.000) 1.000
(10) BGENDIV 0.060 (0.082) 0.014 (0.678) 1.000
(11) AGE 0.077 (0.006) 0.257 (0.000) 0.041 (0.232) 1.000
(12) LEV 0.114 (0.000) 0.078 (0.005) 0.010 (0.768) 0.120 (0.000) 1.000
(13) SIZE 0.162 (0.000) 0.365 (0.000) 0.040 (0.236) 0.079 (0.005) 0.006 (0.823) 1.000
(14) GRWTH 0.097 (0.000) 0.085 (0.002) 0.038 (0.269) 0.045 (0.105) 0.031 (0.261) 0.051 (0.065) 1.000
6.2 Multiple regression analysis
6.2.1 Effect of earnings management on performance – the moderating role of board gen-
der diversity. The results of the two-step SGMM estimator with the Windmeijer (2005) finite-
sample correction are reported in Column 2 of Tables 5 and 6. It is suggested that board
gender diversity matters if the coefficient on the BGENDIV variable is statistically significant.
However, the role of board gender diversity cannot be fully explained without looking at its
interaction effects with EM on firm performance. As can be observed from the results of
Tables 5 and 6, board gender diversity does matter as a determinant of corporate
performance. We observed that our board gender diversity variable exhibits a curvilinear
function with financial performance; hence, we considered a squared-term of the gender
diversity variable in our baseline model estimation (see Table 5). Cheong (2022) also
demonstrated this potential curvilinear relationship of board gender diversity with financial
performance. For robustness test, we transformed the gender diversity variable with
logarithm so as to linearise and normalise it. Thereafter, we re-estimated our model. We
found out that the results were still robust, with board gender diversity showing a significant
negative relationship with firm performance. Our findings appear to support the critical
mass theory where a sufficient number or proportion of women on corporate boards are
required to favourably affect corporate outcomes (Torchia et al., 2011; Gharbi and Othmani,
2022). Moreover, this finding largely corroborates those of prior studies that report
women on corporate boards to have a negative impact on accounting performance in
Table 5 Moderating effect of board gender diversity on the earnings management and firm performance nexus
(1) (2) (3) (4)
Variables Fixed-effect estimator SGMM estimator OLS estimator PCSE estimator
L.ROA 0.118 (0.0893) 0.227 (0.127) 0.286 (0.126) 0.249 (0.0690)
DA 33.16 (16.29) 32.08 (19.14) 34.10 (9.527) 32.65 (5.009)
BREM 3.760 (1.866) 3.872 (1.153) 3.070 (0.815) 2.979 (0.496)
BGENDIV 0.158 (0.110) 0.170 (0.0827) 0.257 (0.0661) 0.313 (0.0730)
BGENDIV_2 0.00540 (0.00233) 0.00644 (0.00217) 0.00747 (0.00256) 0.00839 (0.00200)
BGENDIV_2#DA 0.0273 (0.0103) 0.0297 (0.00990) 0.0280 (0.00583) 0.0274 (0.00699)
BSIZE 0.00299 (0.203) 0.163 (0.142) 0.114 (0.183) 0.143 (0.123)
BINDE 2.250 (1.745) 1.645 (1.183) 0.0538 (2.018) 1.355 (1.467)
BMEET 0.142 (0.474) 0.394 (0.348) 0.336 (0.243) 0.538 (0.245)
OWNCON 0.578 (1.589) 0.437 (0.656) 0.911 (0.412) 0.476 (0.548)
AUDQ 0.701 (2.479) 0.910 (1.363) 0.457 (1.172) 1.335 (0.986)
LEV 2.125 (0.862) 1.022 (0.612) 0.932 (0.351) 1.333 (0.522)
SIZE 2.907 (5.601) 1.323 (1.091) 1.109 (0.770) 1.671 (0.672)
GRWTH 0.104 (0.0836) 0.165 (0.113) 0.185 (0.131) 0.156 (0.0733)
AGE 2.617 (2.508) 0.0364 (0.507) 0.559 (0.275) 0.748 (0.458)
Constant 1,087 (459.0) 749.1 (135.6) 807.8 (288.7)
Country-fixed effects No Yes Yes Yes
Time-fixed effects Yes Yes Yes Yes
Firm-fixed effects No Yes Yes No
Observations 1,166 1,166 1,166 1,166
R-squared 0.503 0.578 0614
Number of groups 105 105 105 105
F-statistic 11.81 340.25
Wald Chi-squared statistic 569.20 343.64
Number of instruments 20
Hansen-J test of over-identification, (0.623)
chi2(1) (p-value)
Difference-in-Hansen tests of exogeneity (0.623)
of instrument subsets, chi2(1) (p-value)
Notes: This table reports empirical results from estimating equation (3) through the use of SGMM approach (Column 2). Columns 1 and 3
present the results of robustness checks with alternative estimators, i.e. FE and OLS. Asterisks indicate significance at 10 (), 5 () and
1% (). The notations in all the regression tables are as defined and measured in Table 1
j CORPORATE GOVERNANCE j
Table 6 Robustness test of the moderating effect of board gender diversity on the earnings management and firm
performance nexus
(1) (2) (3) (4)
Fixed-effect SystemGMM
Variables estimator estimator OLS estimator PCSE estimator
L.ROA 0.0488 (0.0613) 0.219 (0.145) 0.222 (0.121) 0.201 (0.0782)
DA 63.64 (63.82) 79.99 (74.06) 79.03 (51.23) 81.74 (25.88)
BREM 3.743 (1.260) 4.551 (1.088) 4.042 (0.858) 4.330 (0.793)
BGENDIV(a) 0.00478 (1.200) 2.049 (0.851) 1.156 (1.060) 0.681 (0.994)
BGENDIV(a)#DA 38.23 (20.16) 43.34 (21.43) 44.68 (19.07) 45.12 (9.081)
BSIZE 0.0155 (0.236) 0.0901 (0.182) 0.00124 (0.122) 0.140 (0.133)
BINDE 1.685 (1.801) 1.848 (1.584) 0.273 (2.274) 3.488 (2.067)
BMEET 0.619 (0.554) 0.930 (0.335) 0.755 (0.289) 1.043 (0.315)
OWNCON 0.660 (2.137) 0.128 (0.780) 0.573 (0.348) 0.500 (0.480)
AUDQ 3.793 (3.698) 2.876 (1.611) 1.605 (1.142) 3.903 (1.339)
LEV 2.757 (1.162) 1.407 (0.839) 1.255 (0.356) 1.913 (0.723)
SIZE 6.856 (7.269) 2.573 (1.559) 1.890 (0.750) 3.373 (0.739)
GRWTH 0.115 (0.144) 0.202 (0.185) 0.273 (0.202) 0.272 (0.0820)
AGE 2.341 (3.720) 0.430 (0.613) 1.020 (0.522) 1.241 (0.566)
Constant 1,387 (643.9) 808.9 (73.46) 1,105 (355.0)
Country-fixed effects No Yes Yes Yes
Time-fixed effects Yes Yes Yes Yes
Firm-fixed effects No Yes Yes No
Observations 786 786 786 786
R-squared 0.509 0.577 0.650
Number of groups 97 97 97 97
F-statistic 7.68 7.51eþ10
Wald Chi-squared statistic 527.78 332.91
Number of instruments 19
Hansen-J test of over-identification, chi2(1) (p-value) (0.316)
Difference-in-Hansen tests of exogeneity of instrument (0.316)
subsets, chi2(1) (p-value)
Notes: This table reports empirical results from estimating equation (4) through the use of SGMM approach (Column 2). Columns 1 and 3
present the results of robustness checks with alternative estimators, i.e. FE and OLS. Asterisks indicate significance at 10 (), 5 () and
1% (). The notations in all the regression tables are as defined and measured in Table 1
developing countries largely because they fail to reach a critical mass (e.g. Ujunwa, 2012;
Zhang and Qu, 2016). Our findings regarding the effect of board gender diversity on
financial performance within the African context where women representation on corporate
boards is generally below the minimum advocated critical mass proportion of 20% seems
to lend credence to the critical mass theory. In addition, firms in Africa are generally not
pro-gender diversity (Boadi et al., 2022); hence, females who manage to find their way on
corporate boards are mostly on the basis of tokenism (Sotola, 2019) and are often not given
the necessary voice and support to contribute meaningfully to board discussions and
consequently affect corporate performance.
Our study also finds that EM (i.e. DA) appears to be positively related to firm performance
(see Table 5), although this association seems neutralised after re-estimating our model
with the log-transformed BGENDIV variable (see Table 6). More revealing, however, is the
fact that the interaction or moderating effect of board gender diversity in the
EM–performance relationship consistently churns out significant positive results in all our
models and estimations with or without transformations, which serves to establish and
magnify the performance effects of EM. Thus, we affirm that board gender diversity
significantly and favourably moderates the relationship between EM and firm performance.
This finding supports the agency theory’s proposition of the effectiveness of a gender-
diverse board in monitoring managerial opportunism and consequently contribute
favourably towards corporate outcomes.
j CORPORATE GOVERNANCE j
Our results are robust across different econometric estimators: being the fixed effect (FE),
pooled OLS and the PCSE in addition to our baseline SGMM estimator. Additional tests with
the log-transformed BGENDIV variable as well as alternative measurements for EM also
yield consistent results [2]. Hence, we conclude that the performance effect of EM may be
contingent on its board gender diversity. In support of the critical mass theory, we advocate
for a sufficient women representation on corporate boards so that collectively, they are able
to leverage their unique skills and competencies to affect corporate outcomes favourably.
Moreover, our findings reveal that the role of female directors on corporate boards tends to
magnify the favourable performance effects of EM practices, which further lends support for
the advocacy for gender diversity on corporate boards. Evidently, the representation of
females in the boardroom who do not reach a critical mass appears not to independently
yield favourable corporate outcomes. However, their role in EM monitoring seems to result
in efficiency outcomes of EM practices and thereby contributes to performance
enhancement in firms. This should inspire the advocacy for diversity on African corporate
boards, to be able to leverage on their unique abilities to contribute towards favourable
corporate outcomes. The practice of tokenism may be a good start, but ultimately, a
voluntary approach to diversity on corporate boards should be encouraged. Noteworthy
here is the fact that prior studies have documented the connection between female board
members and accounting performance to be negative in countries that apply a regulation
approach of gender requirements, but positive in countries imposing a voluntary approach
of gender requirements (Labelle et al., 2015; Nguyen et al., 2020). Furthermore, it has been
reported that, contextually, women on corporate boards have a negative impact on
accounting performance in developing countries (e.g. Ujunwa, 2012; Zhang and Qu, 2016),
but a positive association with accounting performance is observed in developed countries
(Carter et al., 2003; Lyngsie and Foss, 2017) except those with gender quotas or women
working in family business (e.g. Ahern and Dittmar, 2012; Bøhren and Strøm, 2010;
D’Amato, 2017). Our findings from an African context corroborate the findings from
other developing economies which report of a negative association between board gender
diversity and performance. One possible explanation of the difference in the findings on
the direction of the women on corporate boards–accounting performance association
between developed countries (positive association) and developing countries (negative
association) is the level of gender equality and empowerment (Kwaw et al., 2015), view of
which is also supported by the critical mass theory and the findings of the current study.
Our findings regarding the moderating role of gender diversity on the EM–firm performance
relationship is a pointer for firms in Africa to embrace gender equality and empowerment of
women on corporate boards such that they are able to affect decisions and corporate
outcomes as they reach a critical mass (Gharbi and Othmani, 2022), or, through their
instrumentality in board advisory and monitoring roles (Zalata et al., 2019b), especially with
regard to EM monitoring as the current study reveals.
Our study also finds that board remuneration, board meetings, firm size and leverage have
adverse effects on firm performance, whereas the engagement of a big-4 external audit firm
has a positive effect on firm performance. Board size, board independence, ownership
concentration, firm age and growth opportunities turned out as insignificant determinants of
firm performance. Similar mixed evidences exist in the literature in this area (Aslam and
Haron, 2020). Our findings regarding board independence and board size are
corroborated by that of Nguyen et al. (2015b), whereas our finding regarding big-4 auditor
engagement is corroborated by that of Meah et al. (2021). Nadeem et al. (2019) present
mixed evidences regarding the effect of leverage on firm performance. While their OLS
estimation presents consistent findings with our study, their FE estimation contradicts those
findings.
Intuitively, board remuneration and board meetings with attendant “huge” sitting allowances
are avenues through which funds are expended in an organisation. Given that the oversight
responsibilities of the board, coupled with their strategic decision-making duties, do not
j CORPORATE GOVERNANCE j
contribute towards enhanced operational efficiencies, then, their existence and operations
tend to become detrimental to the current and long-term performance of their firms.
7. Summary and conclusion
The present study sought to investigate the role played by female directors on corporate
boards with regard to EM and its effect on firm performance. The study does this by
examining how female representation on corporate boards moderates EM practices
towards performance enhancements in firms within sub-Saharan Africa. By following a
dynamic panel data modelling and estimation approach which is capable of dealing with
estimation biases that stem from endogeneity, simultaneity and reverse causality, the
present study tests its hypotheses regarding the EM–firm performance relationship, and the
moderating role of gender diversity in this nexus.
First, given the conflicting evidences regarding the effect of EM on firm performance from our
baseline and robustness test models using different estimation approaches (see Tables 4 and 5),
we are unable to conclude that EM has a significant effect on the performance of firms in sub-
Saharan Africa. Therefore, we are unable to accept our first hypothesis that EM is significantly
related with firm financial performance in sub-Saharan Africa. Second, we conclude on the basis
of the consistency of our empirical results regarding the individual dynamic effect of board
gender diversity on firm performance that, board gender diversity does influence firm
performance and therefore matters in the EM–firm performance relationship. This finding
supports the critical mass theory where a critical mass of female directors on corporate boards is
able to affect decisions of the board and, consequently, corporate outcomes favourably. On the
contrary, inadequate female representation on corporate boards tends to adversely affect
corporate performance. Third, the performance effect of EM is contingent on its board gender
diversity, in that gender diversity is able to affect performance positively through its moderating
role on EM practices. Our findings therefore confirm our second and third hypotheses. Hence,
we conclude that gender-diversity indeed matters in firm performance determination and also
moderates the relationship between EM and firm performance strongly.
The contribution of this study to the EM and CG literature is at least twofold. First, unlike most
prior studies examining the EM–firm performance relationship from a static perspective, our
study re-investigates this relationship in a dynamic framework within which the possible impact
of EM, CG structures and other firm-specific characteristics on performance are fully controlled.
By considering dynamic endogeneity and other forms of endogeneity that stem from
simultaneity and time-invariant unobserved heterogeneity, we expect to achieve more reliable
inferences about the causal link between EM and performance. Secondly, by providing robust
empirical evidence from sub-Saharan Africa, we support the emergent proposition that the
performance effect of EM practices can be contingent upon the CG systems of firms (Tang and
Chang, 2013), in this case board gender diversity. Our findings in this regard thus support and
extend the agency theory by using board gender diversity as a moderating variable in the
EM–firm performance relationship. Therefore, shareholders and regulators of firms in sub-
Saharan Africa may observe that instituting sound CG mechanisms including a gender-
diversified board where female directors reach a critical mass, and/or are empowered in their
board advisory and monitoring roles could serve as an effective tool to constrain the EM
behaviour of managers, which usefully would reflect in performance enhancements for firms.
Again, we support the critical mass theory for sufficient representation of females on corporate
boards so as to draw on their diverse abilities and characteristics for firm performance
enhancement. Arbitrarily resorting to mere female representation in the boardroom, or the
practice of tokenism with respect to board gender diversity, may be counterproductive for firm
performance unless they are interacted with EM (Mazzotta and Ferraro, 2020; Vuong, 2021;
Zalata et al., 2021). Instituting gender quotas for listed firms in Africa as suggested by the AfDB
may be a good start towards the advocacy for diversity on boards of listed firms in sub-Saharan
Africa.
j CORPORATE GOVERNANCE j
Similar to other studies, this study suffers from some limitations. Our study observes an
adverse role played by board gender diversity on corporate performance in contradiction
with findings of many other studies (Nyeadi et al., 2021; Awan and Raza, 2022; Khidmat
et al., 2022). We reason this may be because of the fact that CG structures are still
underdeveloped in sub-Saharan Africa, and the representation of females on corporate
boards is still plagued with tokenism with “no voice” of females on corporate boards.
Consequently, females represented on boards are unable to contribute meaningfully to
board discussions and exert any positive effect on board and corporate performance.
Again, in agreement with Oldford et al. (2021), the negative relationship between board
gender diversity and financial performance observed in this study may also be explained in
light of the fact that the social networks of firms in sub-Saharan Africa are not pro-diversity,
hence females represented on corporate boards are not empowered enough to affect
board decisions and contribute favourably towards firm performance. Further studies are
welcomed to validate this study’s findings in other jurisdictions, including within contexts
which are pro-diversity, and also not rife with tokenism so as to be able to compare results
for any cues and significant differences. Furthermore, the curvilinear nature of the
relationship between board gender diversity and firm performance suggests the possibility
of an optimal level of women on corporate boards, beyond which the performance effect of
women on corporate boards would neutralise or diminish. Hence, future research can
investigate this. Besides, we found board independence, board size and ownership
concentration not to be significantly associated with firm performance. Could it be that,
within the African context, having concentrated ownership structures and non-executive
directors serves other purposes other than contribution to firm performance as some other
studies (Wallison, 2006) have indicated? Future research may need to probe further on
some of these findings. Finally, in agreement with Zalata et al. (2021), we invite future
research, especially from a developing market perspective such as Africa, to probe the
several characteristics and skills of female directors on corporate boards that drive their
superior monitoring abilities with regard to EM, and which tend to allow them to contribute
favourably to corporate performance .
Notes
1. Performance is used synonymously with profitability in this study. Again, by performance, we mean
financial performance as measured by return on assets (ROAs).
2. The additional tests have been omitted from the paper to save space, but can be made available
upon request.
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About the authors
Emmanuel Mensah holds BSc and MPhil degrees in accounting from University of Ghana
Business School (UGBS), and is currently a PhD candidate in Business Administration with
Open University of Malaysia. His background is largely in accounting and finance with
interest in econometric applications to accounting and finance. His current research
interests are in financial reporting quality, earnings management, corporate governance,
mergers and acquisitions and financial literacy. He has attended and presented papers at
international conferences organised in Ghana, Liberia, Amsterdam, Dubai and Croatia.
Emmanuel has held adjunct positions at Maranatha University College, and is an
independent reviewer for some international journals. He has worked with companies in the
financial services as well as architectural and construction services industry in Ghana.
Emmanuel Mensah is the corresponding author and can be contacted at: emmanuel.
mensah@upsamail.edu.gh
Dr Joseph Mensah Onumah holds a BSc Administration and MBA degrees from UGBS, and
PhD (Accounting & Finance) from Birmingham Business School, University of Birmingham,
UK. He started as a Graduate/Teaching Assistant at UGBS and was Examiner for the
Institute of Chartered Accountants, Ghana (ICAG). He was an Adjunct Lecturer and later
external Examiner for GIMPA at Greenhill and Institute of Public Administration and
Management (IPAM), University of Sierra Leone, Freetown. He currently examines for the
University of Cape Coast, University of Education, Winneba, Methodist University College
and Islamic University College. His research and consulting interests are in accounting
education, corporate governance and accounting issues in both the public and private
sectors.
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