Corporate Governance Gender Equality and Firm Financial Performance: The Case of Euronext 100 Index

Nektarios Gavrilakis, Christos Floros and Emilios Galariotis

Chapter 5 in Governance and Financial Performance:Current Trends and Perspectives, 2023, pp 105-119 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This chapter analyzes how financial performance indicators and gender equality of large cap stocks impact governance scores. In particular, we examine how the return on equity, reinvestment rate, price to book value, market capitalization and gender equality of large cap firms in Europe are related to their governance pillar scores. Based on the Euronext 100 index, we conduct a multiple regression analysis for the period, 2010–2020. As regards the above financial indicators, we find that return on equity and market cap have a significant positive impact on governance scores. In addition, we conclude that reinvestment rate and price to book value have a negative and significant effect on governance scores. Finally, the low percentage of female board membership is confirmed by the non-effect of gender inequality on governance scores. Our empirical investigation provides evidence in support of the moderate governance score in European companies. However, European companies should consider the benefits of good governance practices and apply sustainable strategies.

Keywords: Corporate Governance System; Agency Theory; Return on Assets; Stock Return; Firm Performance; Responsible Management and ESG (search for similar items in EconPapers)
JEL-codes: G3 G34 M14 M41 (search for similar items in EconPapers)
Date: 2023
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