The Role of Women's Representation on Board Committees in Limiting Earnings Management: Evidence from Saudi Listed Companies
DOI:
https://doi.org/10.37375/esj.v9i1.4009Keywords:
Earnings Management, Accrual-Based Earnings Management, Female Audit Committee, Female Nomination Committee, Female Representation in Committees, Corporate Governance, Saudi Arabia, PLS-SEMAbstract
Motivated by the current public policy of governing reform in Saudi under Vision 2030 and the Capital Market Authority (CMA, 2021), this study investigates women's representation in particular board boards in the process of accrual-based earnings management (EM) in Saudi listed enterprises. Based on agency theory, stakeholder theory, resource dependence theory and upper echelons theory, the research utilizes time series analysis to develop a structural equation model using SmartPLS over 2010–2024. The sample consists of 15 publicly listed companies covering the core sectors of the Saudi capital market, and generates 225 firm-year observations. Female representation on nomination and remuneration committees (FNC) significantly negatively influences EM (β = -0.383, p < 0.001), compared to female representation on all committees (FC), with female presence having a moderate and detrimental effect on EM (β = −0.268, p < 0.01). The number of females on the audit committee (FAC) does not reach statistical significance (β = −0.057, p = 0.310). These results—re-stating the recent evidence from emerging markets (Attia et al., 2024; Rahman et al., 2024)—imply that gender diversity in boardroom governance results depend not just on the presence of women, but also their strategic placement into boards committees (attributable to the strategy, not gender inclusion), and that the political advantage of the institutional structure of the institution will need to occur.
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