Do Women Directors Matter? Examining the Moderating Role of Gender in ESG Disclosure and Cash Holding: Two-Tier Perspective
Tirza Oktovianti Lenggono, Dian Agustia

Airlangga University

Abstract

Purpose - This study aims to examine the role of Women on Board (WoB) in influencing Environmental, Social, and Governance (ESG) disclosure and corporate cash holdings (CCH). Considering the two-tier board structure adopted in Indonesia, this research also analyzes the moderating role of women as directors (Women on Director/WoD) and as commissioners (Women on Commissioner/WoC) in these relationships. Furthermore, the study explores board gender diversity measured using the BLAUIndex to assess the complementary effect of female presence in corporate governance structures.

Design/methodology/approach - This quantitative study employs secondary data sourced from the Indonesia Stock Exchange and Bloomberg. Grounded in tradeoff theory and critical mass theory (CMT). The research analyses company data over the 2017-2023 period, resulting 645 observations.

Findings - The results indicate that ESG disclosure positively affects CCH. WoB, WoD and BLAUIndex enhance the influence of ESG on CCH. The research sample comprises all companies non financial listed on the Indonesia Stock Exchange. The results of this study imply that investors should prioritize companies with strong ESG managing cash holding by promoting WoB. For companies, the existence of WoB can encourage decision-making in cash management.

Originality/value - To the best of the author^s knowledge, this topic is rarely researched, particularly within the context a two-tier governance system incorporating WoB, ESG, and CCH. This study offers empirical support for tradeoff theory and critical mass theory (CMT) by investigating the effect of ESG disclosure on corporate cash holdings, which is further supported by the role of WoB.

Keywords: ESG disclosure, Corporate cash holding, Woman on board, Trade off theory, Critical mass theory

Topic: Sustainability accounting