The paradigm of female directors in the managerial capture of sustainability assurance: an analysis supported by natural language processing methods

Jennifer Martinez-Ferrero, Marta Sánchez-Sancho and Emma García-Meca

Meditari Accountancy Research, 2025, vol. 33, issue 5-6, 1293-1328

Abstract: PurposeSustainability assurance has become essential for enhancing the credibility of sustainability disclosures. However, without harmonized standards, critical literature highlights the risk of managerial capture and questions the effectiveness of assurance in promoting accountability. This study aims to investigate whether board gender diversity serves as a governance mechanism that reduces the risk of capture and whether a critical mass of female directors is necessary to exert a monitoring role.Design/methodology/approachUsing 2,267 assurance statements from European-listed firms (2018–2022), the authors develop an index of managerial capture based on whether assurance reports evaluate compliance with established reporting principles. A higher score indicates a more comprehensive verification process and, consequently, a lower risk of managerial capture. To complement this measure, the authors assess the tone of the assurance statements, where an overly optimistic tone serves as an additional indicator of managerial capture. The monitoring role of board gender diversity is analyzed using panel data regression models and a difference-in-differences approach to account for the influence of board gender diversity regulations.FindingsThe results show that a critical mass of female directors (exceeding 30%) reduces the risk of managerial capture, and that gender-balanced boards (with 40%–60% female representation) are the most effective in monitoring this risk. Moreover, board gender diversity regulations further strengthen the oversight role of female directors.Originality/valueThis study advances the field of sustainability assurance by proposing a governance mechanism that minimizes the risk of managerial capture and illustrates the potential of natural language processing techniques for analyzing sustainability disclosures. It also demonstrates that gender-balanced boards and gender diversity regulations enhance corporate accountability.

Keywords: Sustainability assurance; Managerial capture; Female directors; Gender diversity; Board of directors; SDG 5 gender equality (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:medarp:medar-05-2024-2483

DOI: 10.1108/MEDAR-05-2024-2483

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