Board Size, Board Independence, Gender Diversity in Corporate Boards and Information Asymmetry (Evidence from Non Financial Sector of Pakistan)

Abstract

In, this study we examine the relation among, Gender diversity on boards of corporations, Board independence (PEX), external directors as a percentage of total directors, Board size (NDIR) as independent variables and the levels of information asymmetry in the equity market as a dependent variable. In some other countries prior evidence suggests that the presence of women on boards of directors increases the;: quantity and quality of public disclosure by firms but some studies also puts the results on board which are contrary to this statement. Boards have an important role in ensuring that investors' interests are protected. This study also contributes to a better understanding of the effect of board independence and board size on information asymmetry. After controlling for firm specifics equity characteristics like price volatility and t:mnover using a sample of 45 firms which are consistently lisfed in the period of 2013 to ~0 1 7 from non financial sector of Pakistan stock exchange. We find an indirect relation between board size and equity market liquidity. Our findings indicate that board size is negatively and significantly related to level of information asymmetry while board independence is positively and insignificantly and Gender diversity in negatively and insignificantly related to level of information imbalance between the market participants. 1