Governance, Ownership Structure, and Financial Leverage: The Role of Board Gender Diversity in UK Firms

Dramani Angsoyiri, Fadi Alkaraan () and Judith John
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Dramani Angsoyiri: Lincoln International Business School, College of Arts Social Sciences and Humanities, University of Lincoln, Lincoln LN6 7TS, UK
Fadi Alkaraan: Lincoln International Business School, University of Lincoln, Lincoln LN6 7TS, UK
Judith John: Lincoln International Business School, College of Arts Social Sciences and Humanities, University of Lincoln, Lincoln LN6 7TS, UK

JRFM, 2025, vol. 18, issue 5, 1-22

Abstract: This paper aims to investigate the relationship between governance structure, ownership structure, and financial leverage of corporations in the UK, with a special emphasis on the boardroom gender diversity. The study sample includes 484 UK firms from the FTSE All-Share Index for the period (2015–2023), with 4356 firm-year observations. The results show that CEO duality, gender diversity, managerial ownership, institutional ownership, and government shareholding are all positively associated with financial leverage, thus confirming the importance of these governance and ownership characteristics in determining capital structure policies. On the other hand, board size and the proportion of non-executive directors are not found to have a significant impact on financial leverage, which points to some room for improvement in UK board practices. In this regard, the study contributes to the governance-sustainability-finance nexus discussion by focusing on these dimensions in the UK corporate sector. As such, the findings of this study are important in providing policy recommendations for policymakers and corporate leaders and contribute to the ongoing wave of global corporate governance reforms and practical insights into enhancing governance frameworks at the firm level.

Keywords: governance structure; ownership structure; financial leverage decisions; gender diversity; firms performance; UK (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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