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CSR disclosure
Female directors and CSR in Bangladesh
disclosure in Bangladesh: the role
of family affiliation
Pallab Kumar Biswas, Helen Roberts and Rosalind Heather Whiting 163
Department of Accountancy and Finance, University of Otago,
Dunedin, New Zealand Received 21 October 2019
Revised 31 August 2020
21 October 2020
Accepted 4 January 2021

Abstract
Purpose – This paper aims to investigate the impact of female director affiliations to governing families on
corporate social responsibility (CSR) disclosures in the context of Bangladeshi firms.
Design/methodology/approach – This study uses a quantitative empirical research method grounded
in Socioemotional Wealth (SEW) theory. Data was sourced from Bangladeshi publicly listed non-financial
sector companies’ annual reports and stock exchange trading and publication reports and consists of 2,637
firm-year observations from 1996 to 2011. Pooled multivariate regression models are used to test the
association between corporate social and environmental disclosure and female directors, and the family
affiliation (or not) of those directors.
Findings – The findings provide strong evidence that female directors who are affiliated to the governing
family, founders and other board members reduce CSR disclosure in family firms; unaffiliated female board
directors enhance CSR disclosure, and this effect is significant in both family and non-family firms.
Research limitations/implications – Definitions of family firms and affiliated directors may lead to
over-generalization in the results.
Originality/value – The study highlights variation in the nature of female board appointments in
emerging market family-controlled firms. The findings bring attention to the role of affiliated female director
appointments in family ownership structures and speak directly to family business owners, advisors and
policy makers about the importance of unaffiliated female directors as catalysts of improved CSR disclosure
in family and non-family firms.
Keywords Corporate governance, CSR disclosure, Socioemotional wealth, Female directors,
Family affiliation
Paper type Research paper

1. Introduction
A large body of literature has examined the role and impact of female directors on different
corporate outcomes such as firm performance and CSR disclosure (Post and Byron, 2015;
Byron and Post, 2016), but very few studies have examined this issue with regard to family
businesses in the context of emerging countries. It is generally agreed in the literature that
family-firms are substantially different from widely diffused manager-controlled firms in
terms of the nature of agency conflicts, governance structure and corporate focus. For
example, Bianco et al. (2015) report substantial differences between the governance of family
and non-family owned Italian companies, particularly in terms of female board appointment.
There is also evidence that tokenism and family connections are key drivers of female board
appointments in Asian countries like Malaysia (Abdullah, 2014). Indeed, nepotism in family Meditari Accountancy Research
firms means it is hard for families to replace ineffective family members. This is particularly Vol. 30 No. 1, 2022
pp. 163-192
concerning given that higher family involvement in the governance and management of the © Emerald Publishing Limited
2049-372X
firm has the potential to detrimentally affect firms’ financial and social performance DOI 10.1108/MEDAR-10-2019-0587
MEDAR (Chrisman et al., 2004). Country level factors such as the level of economic development and
30,1 cultural characteristics are likely to affect firm-level outcomes. It is, therefore, not surprising
that the effect of board gender diversity on different firm-level outcomes is mixed (Shehata
et al., 2017; Oh et al., 2019).
In the context of CSR disclosure, prior studies predominantly report a positive
association between board gender diversity and corporate social performance (see, for
164 example, Byron and Post, 2016 for a meta-analysis). However, results differ significantly
when the family-non-family dichotomy is estimated using models to represent the
relationship. For example, Cruz et al. (2019) report that the relative power and legitimacy of
female nonfamily outside directors and female family inside directors enhanced corporate
social performance in US family firms. In contrast, other studies, mostly in the emerging
countries with family domination (Muttakin et al., 2015; Rodríguez-Ariza et al., 2017; Cucari
et al., 2018; Oh et al., 2019; Husted and de Sousa-Filho, 2019) find significantly negative or no
relationship between female directors and CSR disclosure. This is surprising given that
family firms are some of the most influential organizations in the world (La Porta et al., 1999)
and as an internal stakeholder the family is capable of affecting the firm’s environmental
and social performance (Kim et al., 2017). Such inconsistencies in findings imply that further
investigation of governance in family firms in the context of emerging countries may
provide some explanations. As this study is situated in the collectivist and patriarchal
culture but emerging economy of Bangladesh, it is well placed to fill that void. Aligned prior
studies are mostly situated in developed countries (Rodríguez-Ariza et al., 2017; Cucari et al.,
2018) and none specifically trace the affiliation of individual female directors (e.g. Muttakin
et al., 2015; Husted and de Sousa-Filho, 2019). In the current study, the identification of
female director family affiliation over a large sample size and time frame is unique and
provides a level of insight not seen in prior studies.
Using a sample of 2,637 firm-year observations from 1996 to 2011, our paper examines
the relationship between board gender diversity and CSR disclosure in Bangladeshi family
and non-family firms. Bangladesh is an interesting research setting because of the
dominance of family firms, presence of patriarchal culture and the absence of any regulation
regarding board gender diversity requirements. In such an environment, firms have lot of
latitude in selecting the board members.
Our analysis draws on the theoretical view that family firms make decisions to preserve
their Socioemotional Wealth (SEW) (Berrone et al., 2012), and this is heavily influenced by
the patriarchal and collectivist culture of many countries. Using this framework, we
investigate the impact of women on the governance mechanism of family firms in
Bangladesh by testing the association between corporate social and environmental
disclosure and family identification within the business, within the context of patriarchy
and the desire to preserve family control over the business (Binz et al., 2017; Kim et al., 2017).
Before controlling for family ties, our results are consistent with studies that find a
negative relationship between gender diversity and CSR performance (Muttakin et al., 2015).
However, to better understand the impact of female directors on CSR disclosure, we divide
our sample into different groups, family-affiliated female directors, family-affiliated and un-
affiliated female directors, and non-affiliated female directors. We show that for boards
where all female directors are family-affiliated, family firms have a significantly lower CSR
disclosure score compared to firms with an all-male board, while the opposite is true for
family firms whose board has only un-affiliated female directors.
This positive effect of unaffiliated female directors on CSR disclosure is consistent with
empirical evidence showing that very few women reach the top hierarchy of the corporate
ladder. One can argue that those who do succeed have above-average personal competence
and better ability to carry out board’s oversight responsibilities. The negative effect of CSR disclosure
family-affiliated female directors on CSR performance is consistent with the literature in Bangladesh
related to nepotism and dynastic management in family firms (Gonzalez et al., 2020). The
results also provide further insight into the reasons for a negative relationship between
female directors and CSR disclosure in countries where family connections, religious beliefs
and culture may be more influential on women than in developed countries (Syed and Ali,
2019).
This research contributes to the understanding of the contradictory effect of SEW to 165
family firms’ CSR disclosure by considering female directors’ family affiliations [1]. Our
study highlights variation in the nature of female board appointments in emerging market
family-controlled firms. The findings speak directly to family business owners, advisors and
policy makers about the importance of unaffiliated female directors as catalysts of improved
CSR disclosure in family and non-family firms. This study is particularly relevant to those
economies where expectations of male and female family member roles are defined within a
patriarchal mindset [2].
The remainder of the paper is organized as follows. Section 2 describes the Bangladeshi
context, and then discusses the literature and develops our hypotheses. Section 3 details the
methodology. The results are given in Section 4, and Section 5 presents our discussion and
conclusion.

2. Literature
2.1 Women on corporate boards in Bangladesh
Bangladesh is often referred to as a model for sustainable economic development for a less
developed country. It has one of the world’s largest populations, but has maintained growth
of more than 6% per annum during the past decade. However, despite Bangladesh’s history
of natural environmental disasters (exacerbated by climate change) and more recently a
series of catastrophic social disasters (e.g. the Rana Plaza collapse and fire in 2013, and the
Nasim Plastic House factory fire in 2015), Bangladeshi firms display little interest in CSR
disclosure (Belal and Cooper, 2011; Momin and Parker, 2013). The main reasons for no CSR
disclosure are a “lack of resources, the profit imperative, lack of legal requirements, lack of
knowledge/awareness, poor performance and the fear of bad publicity” (Belal and Cooper,
2011, p. 654).
Bangladesh presents an interesting dichotomy in relation to the global notion that the
number of women at the senior level do not reflect their numbers in society mostly due to
reasons such as discrimination, organizational structural barriers, social expectations,
stereotypes and cultural traditions (Low et al., 2015). Bangladesh has the eighth-lowest
gender gap in political empowerment in the world (Farhana, 2013) and has had a female
head of state for longer than any other country in the world (Asian Development Bank,
2015). In addition, the proportion of seats held by women in the national parliament doubled
from 10% in 1990 to 20% in 2011. Women have also been key players in economic
development and progress in Bangladesh during the past 20 years (Nawaz, 2013)[3].
However, the traditional patriarchal beliefs of Bangladesh society place little value on
women (Nawaz and McLaren, 2016) and restrain most women from working outside the
home environment (Khatiwada, 2014). Nawaz (2013, p. 5) notes that “it is conceivable that
women in Bangladesh are victims of socio-cultural norms and practices that do not allow
them traditionally to have access to resources and overall employment”. Enterprising
women must overcome “social and cultural constraints and overt conservatism” as well as
facing “discrimination, harassment and unfavourable working conditions” (Zafarullah and
Nawaz, 2019, p. 1). Indeed, the World Economic Forum’s (2018) economic participation and
MEDAR opportunity (EPO) score ranks Bangladesh in the bottom 10% of its 149 surveyed countries,
30,1 with a score of 0.441. The EPO score for female legislators, officials and managers is an
extremely low 0.120 (sample average is 0.33 and 0 indicates inequality), indicating a high
level of inequality for women in these roles. Only 11% of top managers are females.
Therefore, while women have contributed to the economic sustainability of the
Bangladesh economy, their role and responsibility in the management and leadership of
166 business enterprise, development and governance is minimal. Bangladeshi firms and their
boards of directors are primarily dominated by governing or sponsor (founder) families
(Farooque et al., 2007; Uddin and Choudhury, 2008)[4]. There is no quota for female
representation on boards but international trends provide some pressure to increase female
representation (Alo, 2018). Women who do serve on boards of directors are usually affiliated
via family ownership either directly or by marriage. Abdullah et al. (2011) characterize
Bangladesh as having a collectivist culture that emphasizes group efforts, teamwork and
group and family membership. Therefore the family-affiliated female director’s role is to
support the majority family or founder family interest, keep family secrets safe (Uddin and
Choudhury, 2008) and make little contribution to the economic acumen of daily management
decisions (Tanjeela and Rutherford, 2018). Nawaz and McLaren (2016, p. 19) argue that the
Bangladeshi patriarchal society ensures that women keep silent and that their “silence is a
conscious act to avoid conflict and protect family reputation”. Ahmed and Maitra (2010)
report that Bangladeshi women experience structural discrimination such as access to and
control over resources, property rights, less opportunity for employment and under-
representation in the political sphere because of the country’s prevalent cultural and socio-
economic conditions. In such a setting, this paper examines how increased female
representation on corporate boards affects firms’ CSR disclosure and whether there is any
difference in such representation between family and non-family firms.

2.2 Conceptual overview

SEW characterizes the non-economic and emotional value of a family firm and is associated
with identity, influence and perpetuation of the family legacy (Kellermanns et al., 2012).
Under SEW the appointment of outside directors to the board is associated with benefits and
costs to family owners. Outside directors bring a monitoring and advisory role to the board
and have been found to increase corporate social and environmental performance and
subsequent CSR disclosure (Le Breton-Miller and Miller, 2016; Oh et al., 2019). In the case of
board diversity, the appointment of unaffiliated female directors is viewed as supporting a
board that is better able to monitor self-serving behaviour. Oh et al. (2019) find evidence that
firms with weak family involvement engage in higher levels of CSR and argue that this is
because they realize the advantages of a proper functioning board.
However, according to the negative view of SEW, family-controlling owners who are
concerned with displaying the impression of a good corporate citizen but still preserving
their influence and control over business decisions will see the board as a mechanism to
enforce the family’s domination and influence (Oh et al., 2019) and will appoint directors
based on their family affiliation and personal connections (Cuadrado-Ballesteros et al., 2015).
Family affiliation may therefore facilitate the appointment of women directors (Bettinelli
et al., 2019). Being appointed on the basis of family ties, it is possible for the female directors
to possess limited competencies and business skills and less ability to work independently.
This would also reduce their perception of the importance of CSR-related issues and their
knowledge of possible CSR policies (Bettinelli et al., 2019). In contrast, non-family female
directors can draw from outside experiences and leverage broader social networks to direct
a positive CSR attitude that benefits the firm’s reputation (Cuadrado-Ballesteros et al., 2015;
Campopiano et al., 2019). As a result, the monitoring ability of the board in a family firm is CSR disclosure
limited so that the self-interest of family decision makers restricts efforts to increase CSR in Bangladesh
performance and disclosure (Oh et al., 2019).
This rationale suggests that family firms should exhibit comparatively weaker CSR
performance and hence lower CSR disclosure. However, there is an alternative argument
that suggests that family-affiliated male directors might behave differently from family-
affiliated female directors. According to the work by Rodrígquez-Ariza et al. (2017),
Bettinelli et al. (2019, pp. 214–215) note that: 167
In family businesses, the role played by women may also be influenced by their role in the family,
determining a sort of invisibility and meaning that female family-affiliated directors have less
capacity to influence the firm’s decisions than their male counterparts. They may also operate as
family delegates and be particularly sensitive to the exigencies of the family. In family firms,
therefore, those female characteristics that were expected to increase CSR orientation might also
result in a focus on preserving family interests and aligning the policies defined by other family
members.
We also note that the decision-making ability of female family directors is further stifled by
the patriarchal norms of their domicile. The call for greater representation of women on
boards originated from the liberal and neoliberal strands of feminist theory (Grosser and
McCarthy, 2019), but socialist feminist theory also recognized the strong influence that
patriarchy plays in disadvantaging women (Calas and Smircich, 2006). Such feminist
theorizing has, however, been criticized for being grounded in white, Western views and
that non-Western contexts have been understudied (Özbilgin et al., 2012). In their
transnational review of Muslim majority countries, Syed and Ali (2019) suggest that such
Western ideas of equal opportunity do not capture the complexity of gender relationships in
countries such as Bangladesh. Although men and women are equal because they are created
by one God, there is a strong patriarchal interpretation that supports women’s
subordination to men. This is particularly true when female directors are appointed to the
board because of their family connection.
Based on the above discussion, our study uses the conceptual model displayed in
Figure 1 to explore the relation between female directors, CSR disclosure and family
affiliation. We argue that when family female directors are appointed, they are more likely to
act as tokens and may have a detrimental effect on corporate CSR disclosure practices. On
the other hand, when board gender diversity is based on business expertise, female board
members’ unique characteristics are expected to increase the firm’s CSR orientation.

2.3 Hypotheses development

Very often women have to overcome barriers to their involvement on the board. Barriers
such as sex categorization and gender stereotypes lead the male decision makers to view
women as less capable and less competent leaders, while in-group preferences lead men to

Affiliated Female H2a

Directors

H1 CSR
Family Firms
disclosure

Unaffiliated
Figure 1.
Female Directors H2b
Conceptual model
MEDAR prefer fellow men for high level promotions and appointments, a phenomenon commonly
30,1 known as “homosocial reproduction” (Kanter, 1977; Cook and Glass, 2016). Those women
who could overcome these barriers are generally considered to enhance monitoring and
improve board independence (Carter et al., 2003). However, the level of barriers women face
to take up board positions are likely to be different between family and non-family firms.
Prior studies generally report that females are more likely to be appointed in family firms as
168 they are often selected based on family ties and not because of their business expertise (for
example, Ruigrok et al., 2007 in Switzerland; Nekhili and Gatfaoui, 2013 in France; Darmadi,
2013 in Indonesia; Martín-Ugedo and Minguez-Vera, 2014 in Spain; Bianco et al., 2015 in
Italy).
In the context of Bangladesh, Muttakin et al. (2015) report that in their sample, boards
comprise of 17.3% female directors. With Bangladeshi socio-cultural norms and practices
limiting women’s access to resources and overall employment (Nawaz, 2013), one must
wonder how women come to be appointed to corporate boards. We argue that their
appointment can be attributed primarily to the collectivist culture (Abdullah et al., 2011) and
the dominance of governing or sponsor (founder) families in Bangladeshi firms (Farooque
et al., 2007; Uddin and Choudhury, 2008). Women who do serve on boards of directors in
family firms are usually affiliated by family ownership either directly or by marriage (i.e.
“affiliated female directors”). The role of affiliated female directors on the board is to provide
an appearance of gender diversity (Oh et al., 2019) but to vote to support the majority family
or founder family interest (Uddin and Choudhury, 2008). Our first hypothesis states:

H1. Family firms are more gender diverse than non-family firms in Bangladesh.
When female directors are appointed based on family connection rather than personal
competence, they are unlikely to contribute to the effective monitoring of the board. In
Malaysia, for example, Abdullah et al. (2016) find that the presence of female directors in the
boardroom does not always add value, as female directors create value for some firms while
not for others. In Columbia, Gonzalez et al. (2020) report that family female directors have a
detrimental effect on firm performance, while the non-family female directors have a
positive and significant effect. From a Bangladeshi perspective, Muttakin et al. (2015) report
a statistically significant negative relationship between gender-diverse boards and the
extent of CSR disclosure over the period 2005–2009, which is magnified by family
ownership. In Latin America, Husted and de Sousa-Filho (2019) find that the presence of
women on the board has a negative effect on environmental, social and governance
disclosure. They suggest that this might be due to the collectivist culture observed in Latin
America and the allegiance to the family’s interests in the large number of family firms in
this region (La Porta et al., 1999).
Under SEW, family board involvement strengthens emotional and reputational family
associations to the business. Family members are more sensitive to the firm’s reputation.
Alternatively, asymmetric family altruism stemming from strong family board domination
(Kellermanns et al., 2012) may lead to opportunistic family members seeking to maximize
their own self-interest and/or family members’ nuclear family interests.
According to the SEW framework, family firms may or may not make family control a
priority. Female directors are appointed to contribute to the board function in one of two
ways. From a positive point of view, they can monitor self-serving behaviour and contribute
to the firm’s knowledge about how the firm can increase CSR disclosure (Oh et al., 2019).
Conversely family controlling owners appoint female directors based on their family
affiliation, to comply with family and patriarchal expectations and to preserve the self-
interest of the family owners. According to the negative view of SEW, the appointment of an
affiliated female director to a Bangladeshi board is symbolic only and unlikely to make a CSR disclosure
significant impact on the board’s strategic decisions (Oh et al., 2019). In contrast, unaffiliated in Bangladesh
female directors are appointed independently and are better able to monitor self-serving
behaviour and contribute to the firm’s knowledge about how the firm can increase CSR
disclosure. Accordingly, we extend Muttakin et al.’s (2015) and Husted and de Sousa-Filho’s
(2019) findings and hypothesize the following:

H2a. There is a negative association between affiliated female directors and the level of 169
CSR disclosure.
H2b. There is a positive association between unaffiliated female directors and the level
of CSR disclosure.

3. Data and research method

We used multiple data resources for this study. Data for our unique comprehensive CSR
data set were manually collected from the annual reports of Bangladeshi publicly listed non-
financial sector companies for the 16-year period from 1996 to 2011. Other data on
governance quality and board characteristics, financial variables, ownership variables and
stock volatility were sourced from publicly available annual reports, quarterly publications
of the Bangladesh Securities and Exchange Commission (BSEC), monthly publications of
the Dhaka Stock Exchange (DSE) and daily trade data from the DSE. Complete data are
available for 2,637 non-financial firm-year observations from a population of 2,805. The final
sample constitutes an unbalanced panel.
A list of 50 CSR elements is used to tabulate an equally weighted (Meek et al., 1995)
corporate social responsibility index (CSRI) for each firm-year observation[5]. Each element
is coded 1 if company disclosures indicate its presence, and 0 otherwise. The CSR Index
(CSRI) is calculated for each firm, i, in year, t, using the following equation[6]:

Companyi;t Total Score

CSRIi;t ¼  100 (1)
Number of items relevant to Companyi;t

We note that CSR disclosure level is measured using the publicly available information in
annual reports. Although non-disclosure does not always mean non-compliance, for the non-
disclosure of relevant items a firm was awarded a score of zero, lowering the firm’s
calibrated CSR score for the study.
Female directors are classified as either “affiliated” or “unaffiliated” [7]. Similar to
Ruigrok et al. (2007), female directors are affiliated when they are either sponsors (founders)
of the company or are members of the family of the founders or other directors[8]. All other
female directors are considered to be unaffiliated. In the context of Bangladesh, these
unaffiliated female directors comprise those women who are employed as professionals in
the organization, nominated by the institutional, government or public shareholders to act
on their behalf, and those who are independent directors.
We follow a number of steps to ensure that our classification of affiliated and unaffiliated
female directors is reliable. First, we use information disclosed in the firm’s IPO prospectus
to determine the family relationship between individual female board members and other
directors[9]. These disclosures became mandatory for Bangladeshi firms in 1998. Family
relationships in boards prior to 1998 are determined by the personal details of the directors
disclosed in prospectuses, more recent annual reports where the ownership of the family
members (including family members’ names) are disclosed, and prospectuses of other
MEDAR companies where the same individuals are directors. For any director appointed after the
30,1 prospectus issuance, the relationship is based on the personal details of the individual in the
annual report[10]. The identification of family relationships is also checked via internet
searches.
Classification of firms into family and non-family is critical to examine our research
questions. We have used two criteria in identifying family firms:
170 (1) ownership criteria: the proportional ownership of different groups of shareholders,
namely, local sponsors from the same or related family, foreign sponsors,
institutions and government; and
(2) board control criteria: relative board representation of the four shareholder groups
mentioned before.

Using these criteria, we identify non-family firms (coded 0) when one of the following
conditions is met:
 At least 50.01% ownership is held by either foreign sponsors or government.
 With the exception of public ownership, institutions are the majority owner in the
firm and nominate at least two directors[11].
 No family relationship exists among the directors or no director, including his or her
family members, owns at least 20% ownership in the firm.

If a firm does not meet these conditions, it is coded 1 for family firm.
We test the prediction in H1 by estimating a model that explains the likelihood of having
female directors:

FemDumi;t ¼ a þ b 1 FamFirmi;t þ b 2 BodSizei;t þ b 3 CEODuali;t þ b 4 FirmSizei;t

þ b 5 ROAi;t þ b 6 Leveragei;t þ b 7 CapexRatioi;t þ b 8 FirmAgei;t
þ b 9 MNCi;t þ b 10 InstOwni;t þ b 11 GovtOwni;t þ b 12 FirmRiski;t
X X
þ b INDDUMjt þ
j j
b YEARDUMkt þ « i;t
k k
(2)

In equation (2), the dependent variable, FemDumi,t, takes the value of 1 if the company board
in a given year includes at least one female director, and 0 otherwise. Our first hypothesis is
tested using the b 1 coefficient, which captures the effect of a family firm on the propensity
of having a gender diverse board. All other variables are defined in Table 1. As FemDumi,t is
a binary variable, we estimate equation (2) using the multiple logistic regression model[12].
Given that our sample consists of panel data with multiple annual observations relating to a
single company, we adjust the standard errors for clustering on each company. As
diagnostics to the logistic estimation technique, we test the model for specification error and
multicollinearity. To ensure that there is no specification error, i.e. the logit of the outcome
variable, FemDumi,t, is a linear combination of the independent variables, we re-estimated
equation (2) using the calculated linear predicted value and linear predicted value squared.
The coefficient of the predicted value is significant but the squared term is insignificant,
confirming the regression model is properly specified. Small variance inflation factors (VIFs)
indicate that multicollinearity is not a serious concern[13]. The estimated models are
reported in the results section.
Variable name Label Description

CSR disclosure level CSRI (Total CSR score based on 50 CSR items  CSR items relevant to a particular firm)  100; ranges from 0 to
100
Board gender diversity Gender Number of female directors  board size
Family firm FamFirm Dummy variable equal to one if the firm is a family firm
Female presence on the board FemDum Dummy variable equal to one if there is at least one female director on the board
Gender diverse board in non- NF_Diverse Dummy variable equal to one if there is at least one female director on the board in the non-family board
family firm
Gender diverse board in F_Diverse Dummy variable equal to one if there is at least one female director on the board in the family firm
family firm
Affiliated only female F_AFF Dummy variable equal to one if all the female board members are affiliated in the family firm
directors
Affiliated and non-family- F_AFF_NAFF Dummy variable equal to one if the board includes both affiliated and un-affiliated female directors
affiliated female directors
Non-family-affiliated female F _NAFF Dummy variable equal to one if the board includes only non-affiliated female directors
directors
Board size BodSize The natural log of the number of directors on the board
CEO duality CEOdual Dummy variable equal to one if the chairperson of the board is also the CEO of the firm
Governance level GovScore Governance level based on 65 governance items; ranges from 0 to 65
Capital expenditure ratio Capex Capital expenditure  total assets
Advertising intensity AdvIntensity Advertising and promotional expenditure  total assets
New assets NewAssets Net property, plant, and equipment  gross property, plant, and equipment
Firm size FirmSize Natural log of total assets
Profitability ROA Return on assets (EBITDA  total assets)
Leverage Leverage Total liabilities  total assets
Financial stress FinStress Dummy variable equal to one if the firm has either net loss or negative net cash flow from operations
Firm risk FirmRisk Weekly stock return volatility over the 52-week period ending on the Balance Sheet date
Insider ownership Insider Proportion of ownership by sponsors and directors
Institutional ownership InstOwn Proportion of ownership by institutional shareholders
Foreign ownership ForOwn Proportion of ownership by foreign shareholders
Government ownership GovtOwn Proportion of ownership by Government
Firm age FirmAge Natural log of (1þ number of years since listing on the Dhaka Stock Exchange)
MNC MNC Dummy variable equal to one if the firm is a multinational subsidiary
CSR disclosure

Variable definitions
Table 1.
171
in Bangladesh
MEDAR We test the prediction in H2 by estimating the following regression model that explains the
30,1 extent to which variability across firms in the overall CSR score (CSRI) is explained by
board gender diversity after controlling for different firm characteristics, industry
classification and year:

CSRIi;t ¼ a þ b 1 Femalei;t þ b 2 GovScorei;t þ b 3 FirmSizei;t þ b 4 Leveragei;t þ b 5 ROAi;t

172 þ b 6 CapexRatioi;t þ b 7 AdvIntensityi;t þ b 8 FirmAgei;t þ b 9 FinStressi;t
X X
þ b 10 MNCi;t þ b 11 NewAssetsi;t þ b INDDUMjt þ
j j
b YEARDUMkt
k k

þ « i;t
(3)

In equation (3), the dependent variable, CSRIi,t, is a continuous variable. As the governance,
CSR scores and board characteristics are relatively sticky (Coles et al., 2008), i.e. do not change
much over time, we have used pooled OLS to examine our hypothesis which is a common
practice in the corporate governance and CSR literature. To examine the effect of board gender
diversity and female director family affiliation, we use different definitions of Female:
 dummy variable representing the presence of at least one female director
(FemDumi,t);
 proportion of female directors on the board for firm i in year t (Genderi,t);
 a dummy variable equal to one if all female directors are affiliated for firm i in year t
(AFFi,t);
 a dummy variable equal to one if all female directors are unaffiliated for firm i in
year t (NAFFi,t); and
 a dummy variable equal to one if firm i has both affiliated and unaffiliated female in
year t (AFF_NAFFi,t).

The sign and significance of FamilyFirm (H1), AFF (H2a) and NAFF (H2b) are used to
investigate our hypotheses. All other variables are defined in Table 1.
Drawing on prior research (Farrell and Hersch, 2005; Mínguez-Vera and Martin, 2011;
Gonzalez, 2012; Nekhili and Gatfaoui, 2013; Sila et al., 2016), we use various firm
characteristics as control variables in the regression specification. In regression equation (2),
we include measures of firm size, proxied by the natural log of total assets, board size
(BODSize), CEO duality (CEODual), growth opportunities (Capexp), profitability (ROA),
leverage (Leverage), firm age (LnAge), firm risk (StockVol), multinational subsidiary (MNC),
financial stress dummy (FinStress), ownership by insiders (Insider), institutions (InstOwn)
and government (GovtOwn). All the financial variables are winsorized at the 1st and 99th
percentiles to deal with extreme observations.
In the gender diversity and CSR regression, we include measures of firm-level overall
governance, advertising intensity, profitability, firm size, growth opportunities, leverage,
firm age, multinational subsidiary and proportion of new assets control variables based on
the prior literature in this area (for example, Harjoto and Jo, 2011). Following Biswas et al.
(2019), corporate governance level (GovScore) is measured using a firm-level corporate
governance index[14].
A shortage of qualified and keen women directors offers them the luxury to self-select
firms with desirable governance and CSR characteristics. Firms can also voluntarily choose
to appoint women directors. These options raise two endogeneity issues, namely, sample CSR disclosure
selection bias and simultaneity, where our independent variable is simultaneously in Bangladesh
determined by the dependent variable (Heckman, 1979; Reeb and Upadhyay, 2010). In this
paper, we control for the effects of self-section using the Heckman (1979) two-stage model, a
standard approach to controlling for selection bias (Lennox et al., 2012). In the first stage, we
model Bangladeshi companies’ decisions to appoint female board members using common
predictors from the literature. We estimate the inverse Mills’ ratio from the first-stage 173
regression by following the standard Heckman methodology. In the second stage, we control
for selection bias by adding the inverse Mills’ ratio to equation (3).
To address simultaneity concerns we augment our analysis using three-stage least
squares (3SLS) simultaneous equation models following Coles et al. (2008) and Reeb and
Upadhyay (2010). The simultaneous system is given by:
CSRIi;t ¼ a þ b 1 Femalei;t þ b 2 GovScorei;t þ b 3 FirmSizei;t þ b 4 Leveragei;t þ b 5 ROAi;t
þ b 6 CapexRatioi;t þ b 7 AdvIntensityi;t þ b 8 FirmAgei;t þ b 9 FinStressi;t
X X
þ b 10 MNCi;t þ b 11 NewAssetsi;t þ b INDDUMjt þ
j j
b YEARDUMkt
k k

þ « i;t
(4a)

Femalei;t ¼ a þ b 1 CSRIi;t þ b 2 FamFirmi;t þ b 1 BodSizei;t þ b 2 CEODuali;t

þ b 3 FirmSizei;t þ b 4 ROAi;t þ b 5 Leveragei;t þ b 6 CapexRatioi;t
þ b 7 FirmAgei;t þ b 8 MNCi;t þ b 9 InstOwni;t þ b 10 GovtOwni;t
X X
þ b 11 FirmRiski;t þ b INDDUMjt þ
j j
b YEARDUMkt þ « i;t
k k
(4b)

The 3SLS model incorporates all the available information from the above two equations in
simultaneously estimating the parameters.

4. Results
4.1 Descriptive statistics
Descriptive statistics for the continuous and count variables for the period 1996–2011 are
reported in Panels A and B of Table 2. CSRI and GovScore report mean values of 27.84 and
25.08, respectively. Average board size is six directors and female directorship is 18% on
average. At least one female director is present in 60.94% of the sample, and 30.37% of the
sample has more than one female director. While these numbers are either comparable or
even better than similar statistics in other countries (Adams and Ferreira, 2009; Saeed et al.,
2016), female board representation is not necessarily indicative of their actual role. Female
directors are either sponsors of the company or there is a family relationship with other
directors or sponsors (F_AFF) in 63.95% of the family-firm observations.
The family-firm sample includes 111 (5.66%) instances of at least one unaffiliated and
one affiliated female director (18 unique firms) and 48 instances (7 unique firms) where all
the female directors are unaffiliated. Therefore, it is not surprising that the percentage of
female directors in Bangladesh is at least similar to many other advanced economies given
MEDAR Panel A: Count and continuous variables for the overall period from 1996 to 2011
30,1 Variable N Mean SD Minimum Q1 Median Q3 Maximum
CSRI 2,637 27.84 12.01 2.08 18.75 26.53 35.42 80.00
Gender 2,637 0.18 0.19 0.00 0.00 0.14 0.30 0.80
GovScore 2,637 25.08 13.02 7.00 15.00 19.00 36.00 60.00
BodSize 2,637 6.34 2.08 3.00 5.00 6.00 8.00 19.00
Capex 2,637 0.05 0.07 0.00 0.00 0.01 0.06 0.38
174 NewAssets 2,614 0.93 0.17 0.27 0.98 1.00 1.00 1.00
AdvInt 2,637 0.54 1.31 0.00 0.01 0.07 0.41 8.23
FirmSize 2,637 19.79 1.55 15.33 18.85 19.73 20.61 25.42
ROA 2,620 6.30 9.07 25.29 0.45 6.27 10.84 32.71
Leverage 2,637 0.76 0.68 0.04 0.42 0.61 0.83 4.49
FirmRisk 2,512 0.07 0.03 0.01 0.04 0.06 0.09 0.19
Insider 2,612 0.43 0.20 0.00 0.33 0.49 0.51 0.98
InstOwn 2,612 0.16 0.14 0.00 0.05 0.14 0.25 0.72
ForOwn 2,612 0.02 0.06 0.00 0.00 0.00 0.00 0.57
GovtOwn 2,612 0.05 0.18 0.00 0.00 0.00 0.00 1.00
FirmAge 2,636 2.34 0.79 0.00 1.95 2.48 2.94 3.58
Panel B: Binary variables
Variable N Value (%) Mean CSRI
MNC 2,502 0 94.88 26.87
135 1 5.12 45.81
FamFirm 676 0 25.64 31.68
1,961 1 74.36 26.52
FemDum 1,030 0 39.06 29.84
1,607 1 60.94 26.45
NF_Diverse 482 0 71.30 27.61
194 1 28.70 36.71
F_Diverse 548 0 27.94 27.42
1,413 1 72.06 26.16
F_AFF 707 0 36.05 28.65
1,254 1 63.95 25.31
F_AFF_NAFF 1,850 0 94.34 26.42
111 1 5.66 28.08
F_NAF 1,913 0 97.55 26.07
48 1 2.45 43.99
FinStress 1,440 0 54.61 31.26
1,197 1 45.39 23.72
Panel C: Mean CSRI at different level of gender diversity
Female number N (%) Mean CSRI
0 1,030 39.06 29.61
1 788 29.88 28.32
2 511 19.38 25.50
3 240 9.10 23.99
4 48 1.82 27.87
5 20 0.76 23.56
Total 2,637 100.00 27.84
>=1 1,607 60.94 26.70
Table 2.
Descriptive statistics Note: All the variables are defined in Table 1
that appointments are often determined by personal relationships between appointees, other CSR disclosure
directors or sponsors. in Bangladesh
Panel C of Table 2 presents the mean CSRI for female board membership, ranging from
zero to five directors. Firms with at least one female director have a mean CSRI of 26.70. In
comparison, firms with an all-male board have a mean CSRI of 29.61. The difference is
statistically significant at the 1% level (t-statistic = 6.11, p < 0.01). The average CSRI
reported in Panel C decreases as the number of female directors increases, with the exception
of firms with four female directors. A one-way ANOVA (untabulated) shows that there is a 175
significant difference in CSRI for the group classifications based on the number of female
directors (F-statistic = 14.40, p < 0.01).
Next, we examine differences in firm characteristics between family and non-family
firms using univariate statistics as reported in Panel A of Table 3. The significant test

Panel A: Family and non-family firms

Variable Non-family (N = 676) Family (N = 1,961) t-test Wilcoxon test
Mean (1) Median (2) Mean (3) Median (4) (1)(3) (2)(4)
CSRI 31.68 30.61 26.52 26.00 9.04*** 8.70***
Gender 0.05 0.00 0.23 0.20 29.72*** 21.88***
GovScore 27.41 20.00 24.27 18.00 5.29*** 6.35***
BodSize 7.57 8.00 5.92 6.00 18.11*** 17.44***
Capexp 0.04 0.02 0.05 0.01 0.27 2.80***
AdvInt 0.78 0.10 0.46 0.05 4.31*** 3.99***
FirmSize 20.22 20.23 19.64 19.66 8.39*** 7.39***
ROA 7.99 7.32 5.72 6.00 4.64*** 5.02***
Leverage 0.84 0.61 0.73 0.61 3.00*** 0.57
FirmRisk 0.07 0.07 0.07 0.06 1.35 1.83*
Insider 0.32 0.30 0.47 0.50 13.82*** 13.13***
InstOwn 0.15 0.11 0.16 0.14 0.85 2.52**
ForOwn 0.01 0.00 0.02 0.00 7.05*** 7.18***
GovtOwn 0.21 0.00 0.00 0.00 17.03*** 28.89***
FirmAge 2.45 2.64 2.30 2.48 4.16*** 6.06***
Panel B: Affiliated and Unaffiliated female directors in family firms
Variable F_AFF (N = 1,254) F_NAF (N = 48) t-test Wilcoxon test
Mean (1) Median (2) Mean (3) Median (4) (1)(3) (2)(4)
CSRI 25.31 24.74 43.99 40.18 9.16*** 8.04***
Gender 0.31 0.27 0.13 0.14 32.44*** 9.85***
GovScore 24.22 18.00 25.19 19.50 0.58 2.18**
BodSize 5.90 6.00 7.85 7.00 8.67*** 7.37***
Capexp 0.05 0.02 0.08 0.16 2.76*** 4.40***
AdvInt 0.49 0.07 0.69 0.55 2.19** 4.33**
FirmSize 19.54 19.65 21.06 21.41 5.64*** 5.74***
ROA 6.27 6.68 10.52 9.33 4.70*** 3.89***
Leverage 0.67 0.60 0.43 0.36 7.96*** 5.11***
FirmRisk 0.07 0.06 0.05 0.04 4.31*** 4.04***
Insider 0.49 0.50 0.49 0.51 0.15 1.12
InstOwn 0.17 0.15 0.11 0.13 4.84*** 2.46**
ForOwn 0.02 0.00 0.09 0.06 4.82*** 6.25***
FirmAge 2.25 2.40 2.30 2.44 0.47 0.09
Table 3.
Notes: This table presents descriptive statistics on non-family and family firms. For each variable, we
report mean and median. We use both parametric t-test and non-parametric Wilcoxon rank-sum test to Univariate analysis
report the difference between non-family and family firms. We report detailed definitions of all variables in of family and non-
Table 1. ***and **indicate significance at the 1 and 5% level, respectively family firms
MEDAR statistics show that non-family firms have higher CSRI and governance scores on average.
30,1 Non-family firms are also bigger and older, operate with larger boards, have a stronger
advertising focus and perform better than family firms. Government share ownership is
greater in non-family firms, whereas average foreign ownership in family firms is higher.
Family firms also report greater board gender diversity and insider ownership.
Panel B of Table 3 compares firm characteristics across family firms in terms of all
176 affiliated and all unaffiliated female directors. The univariate test statistics show that firms
in which all female directors are affiliated to the founder or other directors have significantly
lower CSRI. These firms also operate with smaller boards, undertake less capital
expenditure, have greater debt in their capital structure, more institutional and fewer foreign
shareholders, weaker financial performance and more exposed to higher weekly stock
return volatility.
Table 4 reports the Pearson’s product-moment correlations between CSRI and the other
continuous variables. Excluding insider ownership, all the correlations are statistically
significant at the 5% level or better.

4.2 Hypotheses tests

Table 5 reports the regression results for the determinants of board gender diversity in
Bangladesh. In Model (1), we use the logistic regressions that estimate the odds of having
female directors compared with the odds of having no female director. The dependent
variable is one if there is at least one female director on the board, and zero otherwise.
The coefficient for the variable FamFirm is 1.712. This implies that for a one-unit
increase in FamFirm, (in other words, going from non-family to family firms), we expect a
1.712 increase in log-odds of the dependent variable of having at least one female director,
holding all other independent variables constant. The significant odds ratio reported in
Column (3) indicates that, compared to a non-family firm, a family firm is 5.54 times more
likely to appoint a female board member. The logistic regression results also show that
larger firms, multinational subsidiaries and firms with higher government ownership and
greater risk are less likely to have female directors on board. To examine whether our
logistic regression equation is free from any specification error, we use the linear predicted
value and its squared term as the predictors to re-build our model. Untabulated results show
that the linear predicted value is statistically significant ( b = 1.000, p-value < 0.000), while
the squared term is not ( b = 0.001, p-value = 0.982). These results suggest that the model
is properly specified.
In Model (2) a Poisson regression is used to estimate the determinants of the number of
female directors[15]. The coefficient of FamFirm (0.853) in Model (2) is statistically
significant at the 1% level. This means that compared to non-family firms, the expected log
count for family firms increases by about 0.84. The goodness-of-fit chi-squared test-statistics
(untabulated) are insignificant (deviance statistic = 2219.60, p-value = 0.9995; Pearson
statistic = 2053.012, p-value = 1.00), suggesting that the Poisson regression model fits our
data reasonably well.
Finally, in Model (3), proportion of female directors is the dependent variable and pooled-
OLS is used for the regression estimates. Consistent with other two models, the coefficient of
FamFirm is positive and significant ( b = 0.137, p-value < 0.000), implying that the
proportion of female directors is significantly higher in family firms when compared to non-
family firms in Bangladesh.
The results in Table 5 provide strong evidence of the likelihood for family firms and
firms with high family board involvement to appoint females to the board. Our findings
support H1 and are in line with Mínguez-Vera and Martin (2011), Ruigrok et al. (2007),
 CSRI Gender GovScore Capex AdvInt LnTA ROA Leverage FirmRisk Insider InstOwn ForOwn GovtOwn

Gender 0.22***
GovScore 0.43*** 0.11***
Capex 0.15*** 0.01 0.09***
AdvInt 0.36*** 0.05* 0.17*** 0.09***
FirmSize 0.57*** 0.25*** 0.41*** 0.09*** 0.17***
ROA 0.45*** 0.05** 0.25*** 0.21*** 0.33*** 0.25***
Leverage 0.18*** 0.04* 0.12*** 0.18*** 0.09*** 0.19*** 0.43***
FirmRisk 0.16*** 0.01 0.03 0.00 0.08*** 0.06** 0.12*** 0.04
Insider 0.04 0.20*** 0.02 0.09*** 0.20*** 0.12*** 0.21*** 0.16*** 0.09***
InstOwn 0.07*** 0.06** 0.04* 0.00 0.06** 0.11*** 0.01 0.02 0.06** 0.22***
ForOwn 0.08*** 0.08*** 0.03 0.03 0.01 0.12*** 0.05** 0.02 0.01 0.03 0.07***
GovtOwn 0.04 0.24*** 0.01 0.11*** 0.10*** 0.18*** 0.12*** 0.27*** 0.04 0.62*** 0.11*** 0.09***
FirmAge 0.16*** 0.05* 0.22*** 0.21*** 0.11*** 0.01 0.00 0.17*** 0.06** 0.09*** 0.11*** 0.12*** 0.11***
**
Notes: This table presents the Pearson rank correlation coefficients for the independent factors in the models. indicates statistical significance at 5%,
***
indicates statistical significance at 1%

correlation statistics
Pearson rank
Table 4.
CSR disclosure

control variables
for independent and
177
in Bangladesh
MEDAR Presence of female director Number of female directors Proportion of female directors
30,1 (1) (2) (3)
Coeff. z-stat Odds Ratio Coeff. z-stat Coeff. t-stat

FamFirm 1.712*** 3.64 5.538*** 0.853*** 10.85 0.137*** 14.44

BodSize 1.421*** 2.92 4.142*** 0.831*** 13.30 0.041*** 3.14
CEODual 0.001 0.00 1.001 0.077** 1.98 0.002 0.28
178 FirmSize 0.302*** 2.59 0.739*** 0.143*** 11.37 0.030*** 11.84
Leverage 0.143 0.58 0.867 0.076** 2.24 0.006 0.85
ROA 0.002 0.12 1.002 0.000 0.04 0.000 0.72
CapexRatio 1.039 0.94 2.828 0.135 0.57 0.028 0.58
FirmAge 0.218 1.09 0.804 0.079*** 3.02 0.013*** 2.82
MNC 2.197** 2.30 0.111** 1.880*** 5.73 0.020 1.48
InstOwn 1.540 1.41 4.663 0.797*** 5.90 0.103*** 3.82
GovtOwn 2.025* 1.78 0.132* 1.986*** 7.00 0.033* 1.74
FirmRisk 6.149*** 2.66 0.002*** 0.627 1.03 0.171 1.44
Constant 3.589 1.61 36.190 1.003*** 3.60 0.818*** 13.81
Year control Yes Yes Yes
Industry control Yes Yes Yes
Pseudo R2 0.219 0.148 0.271
Wald Chi-stat 112.848 956.330 44.256
N 2,481 2,481 2,481
Table 5.
Notes: This table reports the regression estimates of the determinants of board gender diversity. odds
Determinants of ratios estimated from the logistic regressions of female directors on family ties. All the variables are defined
board gender in Table 1. Z- and t-statistics are based on standard errors clustered at the firm-level. ***, **, *refer to
diversity significance at the 1, 5 and 10% level, respectively

Nekhili and Gatfaoui (2013) and Bianco et al. (2015) who also report a positive impact of
founding-family affiliation on a director’s female gender in Spain, Switzerland, France and
Italy, respectively. Given this result, we investigate the involvement of female directors
further by examining the level of CSR disclosure based on the presence of affiliated and
unaffiliated female directors.
Table 6 reports results from ordinary least square (OLS) regressions where the
dependent variable is the CSR disclosure score. Year and industry dummies are included,
and standard errors are adjusted for potential heteroscedasticity and for group correlations
at the firm level. The specification in Column (1) shows a negative relationship between
family firms and CSR disclosure ( b = 2.70, p-value < 0.05), suggesting that family firms
have a significantly lower CSR score compared to non-family firms. This is consistent with
Muttakin et al. (2015) who also report a negative association between family owned firms
and CSR disclosure. As female directors are more likely to be appointed in family firms, we
replace FamFirm with proportion of female directors (Gender) in Column (2). The coefficient
of Gender is negative and statistically significant ( b = 6.425, p-value < 0.01), implying
that firms with higher percentage of female directors have a significantly lower CSR
disclosure score in Bangladesh. This is also consistent with Muttakin et al. (2015).
To disentangle the impact of female directors from male directors, we classify companies
based on the presence of female directors: firm year observations with all male directors and
firm-year observations with gender diverse boards, i.e. with at least one female director.
Results are presented in Columns (3) and (4) of Table 6. In Column (3), the variable of interest
is non-family firms with all male directors (NF_Male). The coefficient of NF_Male is positive
but statistically indistinguishable from 0 ( b = 1.793, p-value = 0.344). This suggests that
 CSRI
Full sample Full sample All-male boards Diverse boards Non-family
(1) (2) (3) (4) (5)

FamFirm 2.701** (2.42)

Gender 6.425*** (2.71)
NF_Male 1.793 (0.95)
NF_Diverse 3.693*** (3.47) 3.048** (2.49)
F_Diverse
F_AFF
F_AFF_NAFF
F_NAFF
NF_Male*FinStress
NF_Diverse*FinStress
F_AFF*FinStress
F_AFF_NAFF*FinStress
F_NAFF*FinStress
GovScore 0.489*** (8.69) 0.471*** (8.48) 0.423*** (4.63) 0.491*** (7.97) 0.447*** (4.35)
FirmSize 3.193*** (9.03) 3.035*** (8.36) 2.780*** (5.25) 3.560*** (8.83) 3.726*** (7.42)
Leverage 0.310 (0.53) 0.400 (0.71) 0.162 (0.14) 0.772 (1.44) 0.303 (0.37)
ROA 0.248*** (5.54) 0.248*** (5.52) 0.288*** (3.26) 0.232*** (4.95) 0.157* (1.92)
CapexRatio 8.565** (2.43) 8.131** (2.24) 1.274 (0.19) 11.935*** (3.24) 1.802 (0.23)
AdvIntensity 0.684* (1.67) 0.768* (1.79) 0.940 (1.45) 0.416 (0.87) 0.934 (1.60)
FirmAge 1.771*** (3.82) 1.709*** (3.66) 2.157*** (3.14) 1.975*** (3.21) 2.303*** (3.11)
FinStress 1.308** (2.47) 1.245** (2.43) 0.028 (0.03) 1.928*** (3.59) 3.873*** (3.48)
MNC 0.441 (0.17) 1.488 (0.59) 0.195 (0.06) 3.971 (1.03) 0.994 (0.39)
NewAssets 2.662 (1.28) 3.189 (1.40) 10.097** (2.60) 0.168 (0.08) 6.872 (1.01)
CONSTANT 55.358*** (7.27) 52.817*** (6.72) 56.872*** (4.84) 62.624*** (7.01) 67.116*** (5.14)
Year controls Yes Yes Yes Yes Yes
Industry controls Yes Yes Yes Yes Yes
Adj. R2 0.605 0.607 0.616 0.632 0.737
F-stat 19.717 20.202 13.994 23.024 63.030
N 2,596 2,596 1,013 1,583 675

Notes: All the variables are defined in Table 1. t-statistics are based on standard errors clustered at the firm-level and are reported in parentheses next to each
coefficient. ***, **, *refer to significance at the 1, 5 and 10% level, respectively
(continued)

CSR disclosure
Table 6.
CSR disclosure

family affiliation and

Female directors,
179
in Bangladesh
 30,1

180

Table 6.
MEDAR
CSRI
Family firms Family firms Full sample Full sample Full sample
(6) (7) (8) (9) (10)

FamFirm
Gender
NF_Male 0.173 (0.11) 0.186 (0.12) 2.635 (1.30)
NF_Diverse 2.890** (1.97) 2.778* (1.87) 5.308*** (3.11)
*
F_Diverse 1.982 (1.76) 2.262** (1.98)
F_AFF 2.366** (2.06) 2.575** (2.22) 0.625 (0.42)
F_AFF_NAFF 1.259 (0.73) 1.844 (1.03) 1.632 (0.77)
F_NAFF 6.095** (2.01) 5.088 (1.55) 6.635* (1.85)
NF_Male*FinStress 4.845** (2.40)
NF_Diverse*FinStress 5.103*** (2.70)
F_AFF*FinStress 3.724** (2.55)
F_AFF_NAFF*FinStress 0.372 (0.18)
F_NAFF*FinStress 2.983 (0.65)
GovScore 0.492*** (8.40) 0.484*** (8.15) 0.486*** (8.81) 0.480*** (8.62) 0.489*** (8.90)
FirmSize 3.236*** (7.43) 3.058*** (7.63) 3.170*** (8.95) 3.047*** (9.07) 3.053*** (9.20)
Leverage 0.820 (1.00) 0.901 (1.14) 0.295 (0.50) 0.320 (0.56) 0.397 (0.70)
ROA 0.244*** (4.98) 0.242*** (5.19) 0.250*** (5.65) 0.249*** (5.69) 0.239*** (5.55)
CapexRatio 10.302** (2.55) 9.422** (2.42) 8.857** (2.44) 8.307** (2.33) 7.956** (2.23)
AdvIntensity 0.491 (0.97) 0.653 (1.33) 0.689* (1.66) 0.767* (1.86) 0.752* (1.87)
FirmAge 2.025*** (3.22) 1.864*** (3.01) 1.817*** (3.91) 1.740*** (3.74) 1.714*** (3.70)
FinStress 0.960* (1.68) 0.831 (1.49) 1.342** (2.57) 1.261** (2.44) 1.651 (1.21)
MNC 0.000 (0.00) 0.000 (0.00) 1.022 (0.39) 1.310 (0.49) 0.915 (0.35)
NewAssets 4.176* (1.70) 4.034* (1.71) 3.371 (1.57) 3.352 (1.60) 3.728* (1.75)
CONSTANT 61.666*** (6.09) 57.474*** (6.25) 56.864*** (7.39) 54.071*** (7.52) 56.176*** (7.88)
Year controls Yes Yes Yes Yes Yes
Industry controls Yes Yes Yes Yes Yes
Adj. R2 0.555 0.566 0.612 0.618 0.623
F-stat 12.741 14.082 19.319 19.720 21.702
N 1,921 1,921 2,596 2,596 2,596
there is no significant difference in CSR disclosure for family and non-family firms with all- CSR disclosure
male boards. The result is in contrast to the finding in Column (1) where family firms have, in Bangladesh
on average, a significantly lower CSR disclosure score compared to non-family firms.
In Column (4), we examine the effect of gender diversity on CSR disclosure for non-family
firms when there is at least one female director on the board. In this model, the variable of
interest is non-family firms with at least one female director (NF_Diverse). The results show
that non-family firms with diverse boards have significantly higher CSR disclosure scores
( b = 3.693, p-value = 0.000) compared to the reference category of family firms with gender 181
diverse boards.
In Columns (5) and (6), we examine the effect of gender diverse boards on CSR disclosure
in family and non-family firms. Column (5) shows that non-family firms with gender diverse
boards have significantly higher CSR disclosure scores ( b = 3.048, p-value < 0.05)
compared to non-family firms with all-male boards. In contrast, results in Column (6) show
that family firms with gender diverse boards generally have significantly lower CSR
disclosure scores ( b = 1.982, p-value < 0.10) compared to all-male family boards. When
compared to results in Column (2), these results imply that board gender diversity is not
necessarily associated with lower CSR disclosure in all firms. While the impact of gender
diversity is negative in terms of family firms, the impact is significantly positive in non-
family firms.
Following Bianco et al. (2015), to examine whether family-affiliated female directors
perform differently from non-family affiliated women, in Column (7), we split diverse boards
in family firms into three groups: firms where only family-affiliated women sit on the board
(F_AFF), firms where both family-affiliated and non-family-affiliated women sit on the
board (F_AFF_NAFF), and firms with only non-family-affiliated women (F_NAFF).
The coefficient of F_AFF is negative and significant ( b = 2.366, p-value < 0.0.05), while
the coefficient of F_NAFF is positive and significant ( b = 6.095, p-value < 0.05). Compared
to the reference category of family firms with all-male boards, the CSR disclosure score is
not significantly different when the board of a family firm includes at least one affiliated and
at least one non-family-affiliated woman director. These results suggest that the negative
relationship between female representation and CSR disclosure in family firms appears to be
driven by family-affiliated women.
In Column (8), we test if CSR disclosure is different between diverse boards in family and
non-family firms. Companies are classified into four groups: non-family firms with all-male
boards (NF_Male), non-family firms with gender diverse boards (NF_Diverse), family firms
with diverse boards (F_Diverse) and family firms with all-male boards (F_Male). The results
for the full sample show that compared to the reference category of all-male boards in family
firms, gender-diverse boards in non-family firms have significantly higher CSR disclosure
scores ( b = 2.890, p-value < 0.05), while gender-diverse boards in family-firms have
significantly lower CSR disclosure scores ( b = 2.262, p-value < 0.05).
In Column (9), we further examine the results over the full sample. The results show that
compared to the base category of family firms with all-male boards, family firms with only
affiliated female directors have a significantly lower CSR disclosure score, while non-family
firms with gender-diverse boards have a significantly higher CSR disclosure score.
Overall, these results suggest that the negative relationship between female
representation and CSR disclosure in family firms is likely to be affected by the presence of
family-affiliated women. Contrary to the view that board gender diversity leads to more
effective decision processes and better governance (Gul et al., 2011) that increases owner
value, these results show that the appointment of affiliated female board members in the
patriarchal society of Bangladesh is detrimental to CSR disclosure levels. The negative
MEDAR association between CSR disclosure and affiliated female board members in family-owned
30,1 firms is recognized as a possibility within socialist feminist theory because of the
complexity of gender relationships in countries influenced by strong patriarchal views and a
collectivist culture that can disadvantage women. Specifically, we report evidence of token
affiliated female director appointments based on family connections and socio-cultural
norms. Our results illustrate the dominant effect of patriarchal norms that directly affect
182 women’s rights (Syed and Ali, 2019).
In Column (10), we interact each of the gender related variables in Column (9) with the
financial stress dummy[16]. A firm is considered to be in financial stress if the firms incurs a
net loss in the current year or net cash flow from operating activities is negative. The results
show a significantly negative interaction between each of NF_Male, NF_Diverse and
F_AFF and financial stress. Compared to a family all-male board the findings indicate that
in the presence of financial distress nonfamily all-male and diverse boards have lower CSR
disclosure. Considering the affiliation of women for gender diverse boards, CSR disclosure is
lower for boards with affiliated female directors but not for boards including non-affiliated
female directors. Specifically, during periods of financial distress, female director affiliation
in family firms is associated with lower firm CSR disclosure.
Among the control variables, the coefficients of governance quality measure, firm size, firm
performance, growth opportunities, advertising intensity and firm age are all positive and
significant irrespective of model specifications. The significant negative FinStress coefficient
reported for all models indicates that firms facing financial difficulty have comparatively lower
CSR scores than other firms. The coefficients of other control variables such as MNC, leverage
and asset newness are not consistently significant across different model specifications.

4.3 Robustness
Consistent with Hutchinson et al. (2015) and Gyapong et al. (2016), we adopt the Heckman
(1979) two-stage model and the three-staged least squares (3-SLS) regression analysis to
mitigate potential self-selection bias of females to boards and other forms of endogeneity.
Table 7 reports the results for the Heckman two-stage models.
The models reported in Columns (2)–(5) show that the Mills coefficient is not statistically
significant. The results also confirm our previous findings that:
 greater female board representation reduces CSR disclosure for the full sample;
 gender diverse family (non-family) firms have significantly lower (higher) CSR
scores when compared to the family firms with all-male boards;
 family firms with affiliated female directors have significantly lower CSR scores
when compared to the family firms with all-male boards.

To address endogeneity bias arising from unobserved heterogeneity and simultaneity, we

use a system of equation in which we simultaneously determine board gender diversity and
CSR scores using a 3-SLS estimation approach. The estimated equations are presented in
Panel B of Table 7. The results are consistent with the earlier findings and indicate a strong
significant negative (positive) association between the proportion of affiliated (unaffiliated)
female directors and CSRI.
As disclosure regarding family relationship among board members in the prospectus
only become mandatory in 1998, we excluded observations before 1998, and re-estimate our
models based on data from 1998 to 2011[17]. The number of family and non-family firms
entering the regression becomes 1,695 and 614, respectively. The results (untabulated) are
qualitatively similar.
Panel A: Heckman selection model
CSR disclosure
First stage Second stage in Bangladesh
FEMDUM CSRI
(1) (2) (3) (4)
FamFirm 1.023*** (3.83)
Gender 6.678 (2.60)
**

NF_Male 1.912 (0.93) 1.673 (0.81)

NF_Diverse 3.961** (2.33) 3.686** (2.16) 183
F_Diverse 2.333* (1.95)
F_AFF_FEM 2.609 (2.17)
**

F_AFF_NAFF 2.275 (1.22)

F_NAFF 4.811 (1.46)
Mills 0.378 (0.26) 2.436 (1.27) 2.116 (1.12)
Other controls Yes Yes Yes
Adj. R2 0.600 0.606 0.612
F-stat 18.246 17.657 17.807
N 2,481 2,458 2,458 2,458
Panel B: 3-stage-least squares
CSRI Gender
Coeff. z-stat Coeff. z-stat
Gender 16.808*** 6.23
CSRI 0.003*** 2.92
GovScore 0.484*** 18.65
AdvIntensity 0.623*** 4.58
FirmSize 2.658*** 17.67 0.019*** 4.11
Leverage 0.183 0.65 0.003 0.56
ROA 0.247*** 10.24 0.001 1.42
CapexRatio 8.831*** 3.71 0.022 0.42
FirmAge 1.822*** 7.84 0.006 1.16
MNC 0.260 0.29 0.011 0.59
FinStress 1.165*** 3.20
NewAssets 2.965*** 3.08
FamFirm 0.133*** 12.40
BodSize 0.038*** 3.53
CEODual 0.005 0.73
InstOwn 0.103*** 4.24
GovtOwn 0.040* 1.69
FirmRisk 0.050 0.46
CONSTANT 43.610*** 11.81 0.625*** 7.94
Other controls Yes Yes
Pseudo R2 0.584 0.296
Wald Chi-Sq. 3576.476 1006.350
N 2,458 2,458

Notes: All the variables are defined in Table 1. Z-statistics are based on standard errors clustered at the Table 7.
firm-level and are reported in parentheses; ***, **, *refer to significance at the 1, 5 and 10% level, Sample selection and
respectively endogeneity

5. Discussion
We examine the effect of affiliated and unaffiliated female directors on firms’ CSR disclosure
level in the context of Bangladeshi firms. Our findings provide strong evidence that:
 Boards of directors with only family affiliated female directors are associated with
significantly lower CSR disclosures compared to an all-male board.
MEDAR  Family firms with only unaffiliated female directors are associated with
30,1 significantly higher CSR disclosures compared to family firms with all-male
directors in the family firm sub-sample.

Our results make three important contributions to the existing literature concerning CSR
disclosure and board gender diversity. First, we find strong evidence that family firms in
Bangladesh are more gender diverse than non-family firms. Specifically, we report that
184 family-owned and family-controlled boards have a significant influence over decisions
related to the appointment of female directors. Second, we report that the fraction of female
directors on the board has a negative (positive) and significant relationship with CSR
disclosures in family (non-family) firms, suggesting that the relationship between gender
diversity and CSR reporting depends on whether a firm is family controlled or not and the
influence of patriarchal control. This finding confirms the results reported by Muttakin and
Khan (2014) and Muttakin et al. (2015). However, our study adds to this literature by
classifying female directors as affiliated and unaffiliated, based on family associations
within the board, and by examining the relationship with CSR disclosure for family and non-
family firms. Accordingly, our third contribution is that higher CSR disclosure is
significantly related to the presence of unaffiliated female director(s) only within family
firms whereas boards consisting of family affiliated female directors only, significantly
reduce CSR disclosure of family boards.
The evidence suggests that while gender diversity may play a role in CSR disclosure, the
relationship between appointed female directors within the ownership structure of the firm
and to other directors is a critical factor in the association between female board
appointment and CSR disclosures.
We find that consistent with the detrimental side of SEW, family owned firms pursue
non-economic family-centered goals (Chrisman et al., 2012). The appointment of affiliated
female directors regardless of meritocratic considerations (Chrisman et al., 2014) suggests
that family firms in collectivist societies such as Bangladesh (Abdullah et al., 2011; Husted
and de Sousa-Filho, 2019) use their absolute power to maintain control over business
resources. Appointing female and affiliated female directors to provide a good external
impression (Oh et al., 2019) but to internally just take a seat on the board with no expectation
of input to decision making on CSR disclosure suggests that female director appointments
within family firms enable controlling family owners to restrict efforts to increase CSR
disclosure. The findings are consistent for stable and financially stressed firms.

6. Concluding remarks
Drawing on arguments derived from socioemotional wealth theory, feminist theory and socialist
feminist theory we test whether affiliated female directors affect the level of CSR disclosure in
family firms. Our study extends current theory by analyzing the moderating effect of female board
member family affiliation on CSR disclosure in family and non-family firms. Using 2,637 firm-year
observations from 1996 to 2011, we show that female directors have a negative effect on CSR
disclosure. However, when we separate female directors into three groups, namely, family-affiliated
female directors, family-affiliated and unaffiliated female directors and unaffiliated female directors,
we find that the latter has a positive and significant effect on CSR disclosure in family firms. This
provides new evidence for the role of unaffiliated female directors to better monitor self-serving
behaviour in family firms, especially in relation to CSR disclosure. The results show that affiliated
and unaffiliated female board members contribute differently to the advisory and control
responsibilities of the board when applying oversight to CSR disclosure. In particular, firm
ownership and the patriarchal environment that dominates business in Bangladesh adversely affect
the ability of affiliated female directors to perform both of these duties. More specifically, our CSR disclosure
findings point to the need for regulatory bodies to apply guidance around initiatives designed to in Bangladesh
increase board gender diversity that consider the supply and legitimacy of female directors’
appointments. This is in addition to ongoing regulation regarding board composition to consider
how board appointments are influenced by ownership structures and the role that female director
relationships play within these. This is clearly an area for future research and should incorporate
qualitative fieldwork to examine female board representation in countries where socio-cultural
norms and patriarchal cultures dominate. Additional research that examines the relationship
185
between female directors’ attributes and CSR disclosure will also contribute to our understanding of
the role of affiliated female directors within family firms.
From a policy perspective, governments and regulatory bodies in countries with
patriarchal cultures need to be aware of the effect that board composition in family-owned
businesses has on CSR disclosure requirements. Specific rules governing the type of
information that must be reported in relation to board appointment will improve
transparency and allow investors to better assess the positive and negative consequences of
the firm’s business.

Notes
1. SEW can both encourage and hinder family businesses’ abilities to improve CSR (Kellermanns
et al., 2012).
2. Bangladesh is a traditional patriarchal society. Deeply rooted unequal gender relations within
states, political institutions and legal systems mean that males play a dominant role within
families, communities and society as a whole (Tanjeela and Rutherford, 2018).
3. For example, approximately 85% of the 4.2 million people employed in the ready-made garment
(RMG) sector are women. Bangladesh’s economic success in the past two decades is in large part
due to the RMG exports to Europe and North America (Khatiwada, 2014), contributing around
76% to total export earnings.
4. “Sponsor” in the Dhaka Stock Exchange (Listing) Regulation (2015) refers to any person or
institution who subscribes to the initial capital of a company or a mutual fund or a collective
investment scheme.
5. There is no database that provides comprehensive coverage of Bangladeshi firm CSR
information. The index consists of 50 CSR elements that include community involvement,
environmental disclosure, employee information, product and service information and other
social responsibility disclosure and is available upon request from the authors. The CSR items
were drawn from previous research (Gray, et al., 1995; Belal, 2001; Haniffa and Cooke, 2005;
Branco and Rodrigues, 2006, 2008; Azim et al., 2009) and deemed applicable to the Bangladesh
environment (Khan et al., 2013). Appendix contains specific details of all the factors included in
the index. See Appendix for the specific details of all the factors in the CSR index.
6. Cronbach’s alpha for the five sub-indexes in our CSR index is 0.7666, indicating that the set of
items in the CSR index capture the same underlying construct (Cronbach, 1951).
7. The classification is based on the available disclosures in prospectuses, annual reports and online
documents, and so there might still be instances where the female member is erroneously
classified as unaffiliated.
8. We assume a strong relationship between other director appointments and the family members.
The female director may be affiliated by family to anyone on the board, not necessarily the
founder family.
9. Disclosure required by Bangladesh Public Issue Rules of 1998 (amended in 2006 and 2015).
MEDAR 10. Although the results show that firms with affiliated female directors tend to have a lower CSR score, this
30,1 may lead to a problem of over-generalization. There might be instances where the affiliated female
members do act professionally, like an unaffiliated female director. Similarly, due to other commitments,
there is no guarantee that unaffiliated female directors will not act like affiliated female directors.
Therefore, future studies should look into alternative ways of classifying female directors.
11. Untabulated results show that at least two institutional directors are available in 212 firm-year
186 observations, while at least three institutional directors are present in 96 firm-year observations.
12. In untabulated results, equation (2) is also estimated using a probit regression model. The results
are qualitatively similar to the logistic regression estimation.
13. All the variance inflation factors (VIFs) are less than 3.62, implying that multicollinearity is not a
serious problem in the estimation of the models. Typically, multicollinearity becomes a serious
problem when VIFs exceed 10 (Gujarati and Porter, 2009).
14. An unweighted aggregate of scores within four categories: Ownership Structure and Investor Rights (9
elements); Financial Transparency and Information Disclosure in the Annual Report (15 elements); Board
and Management Structure and Process (29 elements); and Auditing (12 elements).
15. Results are qualitatively similar if we use a negative binomial regression.
16. We thank an anonymous reviewer for suggesting this possibility.
17. We thank an anonymous reviewer for making this point.

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Appendix. CSR disclosure checklist CSR disclosure
in Bangladesh

Disclosure item

I. Community involvement
1 Disclosure on charitable donations and subscriptions 191
2 Sponsoring and advertising (e.g. sponsoring sporting and recreational projects, support for the
arts and culture)
3 Donations to Chief Advisor’s/PM’s Relief fund
4 Support for education (including any scholarship program)
5 Support for public health
6 Participation in governmental social campaigns
7 Other community activity disclosure
II. Environmental disclosure
8 The firm has disclosed its environmental policies
9 Disclosure that the firm has complied with international and/or legal laws regarding environment
protection
10 Disclosure that the firm has taken steps to control pollution (tannery effluent/treatment plan,
dust control)
11 The firm has taken steps for prevention or repair of environmental damage (e.g. tree plantation)
12 The firm has taken steps to conserve of natural resources and recycling activities (e.g. water
treatment)
13 The firm has provided support for public/private action designed to protect the environment
14 The firm has been awarded for environmental protection/performance
15 Other environmental disclosure
III. Employee information
16 Number of employees or human resources or workers
17 Employee relations/Industry relations
18 The firm has incurred employee welfare related expense (e.g. canteen subsidy, medical expense,
games, sports and picnic, merit scholarship, cultural and ceremonial expense, death
compensation, uniform and liveries, etc.)
19 Information on the firm’s emphasis on employee education and training/ HR development
20 Number of employees trained
21 Amount spent on employee training
22 Categories of employees trained
23 The company has established a recognized contributory provident fund scheme
24 In the current year, the firm provides gratuity for its permanent employees
25 The firm has a group term insurance scheme for its permanent employees
26 In the current year, the company makes allocation (5%) to WPPF and WF
27 The firm has disclosed information on managing agent/ Officers’ remuneration
28 Employees/workers’ occupational health and safety
29 Company’s policy on child labour
30 The company has policies on recruitment and promotion of employees
31 The firm has disclosed the number of employees receiving salaries above Tk. 3000/month
32 The firm has disclosed the number of employees receiving salaries below Tk. 3000/month
33 The board has appreciated employees for their efforts
34 Other employee disclosure
IV. Product and service information
35 Nature of business and types of product produced
36 The firm has disclosed information on product development and research
37 Information on the firm’s product quality policy is disclosed
38 The firm has provided discussion on its marketing network
39 The firm has disclosed on the usage of production capacity during the year
(continued)
MEDAR
Disclosure item
30,1
40 Other product related disclosure
V. Other social responsibility disclosure
41 Policy/Information on fair business practices (e.g. employment and advancement of women, etc.)
42 Expenditure on energy (fuel, electricity, etc.)
43 Disclosure on the total amount contributed to the national exchequer (in the forms of income tax,
192 VAT, import duty, development surcharge and other indirect taxes and duties)
44 Value of imports (foreign currency paid)
45 Value added statement
46 BOD statement on commitment to establishing high level of ethics and compliance in the
organization
47 Existence of a code of business conduct and ethics/core values
48 The contents of a code of business conduct and ethics/ Disclosure of statement of ethics and
values, covering basic principles such as integrity, conflict of interest, etc.
49 Dissemination/communication of the statement of ethics and business practices to all directors
and employees and their acknowledgement of the same
50 Management appreciation to different stakeholders (except employees)

Corresponding author
Pallab Kumar Biswas can be contacted at: Pallab.biswas@otago.ac.nz

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