Are female directors more cautious? The impact of board gender diversity on sentiment in earnings press releases

Abstract

We examine the impact of board gender diversity on the sentiment in earnings press releases. Managers may use press releases to manage readers’ perceptions of corporate performance and we posit that gender diverse boards actively monitor managerial disclosures and tend to favour more cautious language in the press releases. Using a sample from ASX top 200 company voluntary disclosures and natural language text extraction processes, we find that board gender diversity is associated with the use of more cautious sentiments and less positive sentiments in earnings press releases. Further robustness tests validate our findings. We provide insights to practitioners and regulators by contributing to an ongoing regulatory debate on board gender diversity