Does a Female Director in the Boardroom Affect Sustainability Reporting in the U.S. Healthcare Industry?

Abstract

In this in-depth study, we explored the nuanced dynamics of boardroom gender diversity and its consequential impact on sustainability reporting within the U.S. Healthcare sector. Leveraging a comprehensive dataset from Refinitiv Eikon, our analysis spanned a spectrum of 646 observations across 57 healthcare entities listed in the S&P 500, covering the period from 2010 to 2021. Our methodology combined various empirical techniques to dissect correlations, unravel heterogeneity, and account for potentially omitted variables. Central to our findings is the discovery that various metrics of board gender diversity, such as the proportion of female directors and the Blau and Shannon diversity indices, exhibit a robust and positive correlation with the intensity and quality of sustainability reporting. This correlation persists even when controlling for a multitude of factors, including elements of corporate governance (such as board size, independence, and meeting attendance), as well as intrinsic firm characteristics (such as size, profitability, growth potential, and leverage). The presence of female directors appears to not only bolster the breadth and depth of sustainability reporting but also align with a broader perspective that their inclusion in boardrooms significantly influences corporate reporting practices. These insights extend beyond academic discourse by offering tangible and actionable intelligence for policymakers and corporate decision-makers. By elucidating the intrinsic value of gender diversity in governance, our study contributes a compelling argument for bolstering female representation in leadership roles as a catalyst for enhanced corporate responsibility and stakeholder engagement.

1. Introduction

The representation of women in high levels of management and corporate boards has recently been a point of interest for academics worldwide. In the past, the presence of women in top management was at the lowest levels in the sphere of business globally. For instance, in the twentieth century, just 3% of females were seen to have held high management positions in significant firms’ headquarters in the United States. Similarly, approximately 2% of high management positions in Europe were held by women. The percentage was consistent in many other countries, such as Italy, where the female percentage in high management positions has never exceeded 1% (Rinaldi and Tagliazucchi 2021). However, as many nations are implementing equality laws to encourage gender diversity, the percentage has gradually, but consistently grown (England et al. 2020). Accordingly, the issue of female presence in top management and gender diversity, in general, has gained substantial attention around the world (Wang 2020; Yarram and Adapa 2021; Gull et al. 2022a; Harakeh et al. 2022).

The board of directors is an important component of any firm’s governance structure due to its role in supervising and monitoring management practices to prevent managers from making suboptimal use of resources at the expense of accruing shareholder value (Watson 2011; Shatnawi et al. 2022). A substantial number of studies connect board composition with governance and performance (Wang 2020), and the presence of female directors is one of the most studied features of boards (García-Sánchez et al. 2020).

Research has also shown that gender-diverse boards generally have better and more transparent financial reporting. As stated by Bart and McQueen (2013), more women on the senior management positions is linked to better decision-making as well as high performance. It is clearly observed also in the public and private institutions where most of the empirical research confirms a positive association between women’s participation and organizational performance (Ali et al. 2014; Uyar et al. 2021; Halliday et al. 2021; Brahma et al. 2021). This performance improvement is attributed to the diverse skills and characteristics provided by women in management positions, as well as to the absence of discrimination in the selection of managers, which allows organizations to choose leaders based on competencies irrespective of gender (Kim and Starks 2016). For instance, research conducted on public hospitals revealed that gender diversity is related to financial performance at every organizational level (Naciti et al. 2022). In the U.S. context, where corporate governance structures and reporting standards are uniquely shaped by both regulatory and cultural factors (Aguilera and Jackson 2010), the influence of gender diversity acquires specific contours. Particularly in the healthcare industry, in which firms face a complex array of financial reporting requirements and ethical considerations, the composition of the boardroom can significantly impact how these entities approach their reporting obligations.

Another point of interest is the issue of what to disclose and the type of reporting provided to stakeholders as global economies become more interrelated through international trading and investments due to multinational companies spreading. Accordingly, the issue of disclosure becomes more critical for both stakeholders and policymakers. In particular, this includes the reporting that was created to support financial accounting to meet the needs of shareholders and enhance performance, such as sustainability reports, intellectual capital statements, and value reporting. These tools assist organizations in developing talents and competencies that are critical for obtaining a long-term competitive advantage (Cordazzo et al. 2022; Duong and Thanh 2022).

Sustainability reporting has been a developing trend across governments in recent years (Thoradeniya et al. 2022). This is partly attributable to governments realizing the value of sustainability reporting in promoting the long-term development of these countries (Gunawan et al. 2020). Sustainability policies keep businesses accountable to additional stakeholders who have started to put pressure on them to perform responsibly, in addition to their shareholders. Furthermore, sustainable practices highlight a firm’s competitiveness while also improving the reputation, legitimacy, and societal acceptance required for success (Jamali et al. 2008; Baah et al. 2020). However, all publicly traded firms are required to report their environmental, social, and governance (ESG) influence by 2030, as sustainability disclosure results in increased value (Clarkson et al. 2013) and improved performance (Qian and Schaltegger 2017).

Interestingly, boards with a diverse gender composition demonstrate a deeper commitment to ethics and a proclivity for reflecting the interests of communities and stakeholders (Alam et al. 2023). Furthermore, females are more sensitive to ethical and social problems and more conscious of environmental dangers (Loureiro and Lotade 2005). Thus, corporate governance reforms emphasize female presence in boardrooms (Adesua Lincoln and Adedoyin 2012; Zaid et al. 2020b).

There have been several studies conducted to examine the relationship between gender diversity, environmental, social, and innovation as a social responsibility. He and Jiang (2019), for instance, demonstrated that the presence of women on boards in China is associated with green innovation (He and Jiang 2019). Another positive relation was also discovered in the United States by Nadeem et al. (2020) and in China by Galia et al. (2015). Similarly, it has been demonstrated by Post et al. (2011) that companies in the United States with three or more women directors on their boards demonstrate more environmental and social responsibility. However, our study differed from the wide extent of research during our investigation on how gender diversity might impact sustainability reporting. Firstly, the approaches for boosting board gender diversity vary between countries. For instance, the principles-based approach and comply-or-explain model are followed in countries like the United Kingdom, Germany, Australia, Belgium, and Italy (Galle 2014; Kang et al. 2023), whereas the United States promotes strong corporate governance through a rules-based approach or a mandatory quota approach (Schoen 2006). Unlike previous studies on gender impacts on sustainability practices, which have been primarily based on data from the principles-based approach (Chapple and Humphrey 2014; Capezio and Mavisakalyan 2016) and conducted on cross-industry samples (Shamil et al. 2014; Moses 2021) or cross-country (García-Sánchez et al. 2019; Buallay et al. 2022), we conducted our research on data from the rules-based approach because there have not been many studies conducted on how gender affects sustainability reporting in the healthcare sector.

Secondly, although there have been a considerable number of studies examining gender diversity and sustainability reporting, they have mostly relied on one single measure of gender diversity, which is the percentage of female directors. However, recognizing the multifaceted nature of board dynamics and decision-making processes, this study extends beyond the traditional single-dimensional approach. While not discounting the validity of the percentage of female directors as a measure, we aim to enrich the understanding of gender diversity’s impact by incorporating additional metrics—the Blau and Shannon diversity indices. This inclusion is not to suggest that the conventional measure is inadequate but rather to offer a broader, more nuanced perspective. As a result, in examining the influence of gender diversity on sustainability reporting, we look at a variety of gender diversity indices. Thus, women representation on the board and Blau and Shannon diversity indices are considered important. This is in contrast to Liao et al. (2015b), who investigated the influence of women directors on carbon emission disclosure and, similarly, Fadli et al. (2019), who used a dummy variable to measure board gender diversity and its influence on CSR reporting. Therefore, this study may offer new insights that previous studies might have missed by considering other measures.

Thirdly, our emphasis is not on a specific disclosure, such as carbon emission disclosures (Liao et al. 2015b) or greenhouse gas disclosures (Tingbani et al. 2020), but rather on sustainability reporting, which we assess using Refinitiv’s ESG ratings. Our focus, for example, differs from Simnett et al. (2009), who conducted a cross-country analysis, which does not evaluate the influence of corporate governance on sustainability. In comparison to the dummy variable employed by Liao et al. (2015a), the two-step technique employed by Simnett et al. (2009), or qualitative disclosures, the typology employed in our work aids in analyzing sustainability by applying thresholds. Importantly, the findings of the previous studies are not comparable because of the methodical differences among the results (Drempetic et al. 2020; Dimson et al. 2020; Wieczorek-Kosmala et al. 2021). However, a variety of previous studies have used the ESG scores from Refinitiv Eikon to measure the sustainability of firms such as Shakil (2021), Demers et al. (2021), Karaman et al. (2021), and Wieczorek-Kosmala et al. (2021). The possibility of calculating public domain-reported data transparently and objectively is the most important advantage of using the ESG score from Refinitiv Eikon. Furthermore, the scoring system computes both the positives and the negatives.

Lastly, unlike previous research on female impacts in sustainability practices, which has mostly been conducted on cross-industry samples (Shamil et al. 2014; Moses 2021) or cross-country (García-Sánchez et al. 2019; Buallay et al. 2022), our study is based on the U.S. healthcare industry. The contribution of the healthcare system to environmental degradation, such as plastic pollution, waste production, and toxic waste, has increased the need for healthcare professionals to, directly and indirectly, address environmental challenges (Silva et al. 2021). In addition, climate change has a specific impact on the healthcare business. Global temperature variations caused by climate change kill around five million people each year. Global warming adds to excessive temperature-related mortality, contaminated food and water sources, increased infectious disease risk, and indirect economic disruption. In this context, healthcare is the cause of 4% of the nation’s greenhouse gas emissions in the United Kingdom and 4.6% in Canada, whereas it is responsible for 10% of the nation’s greenhouse gas emissions in the United States. Accordingly, the healthcare sector is also a considerable contributor to climate change (Engler et al. 2022).

Consequently, the current study seeks to examine how board gender diversity impacts sustainability reporting in the U.S. healthcare business. Prior empirical studies have frequently focused a broader variety of industries (Tingbani et al. 2020). However, we chose the healthcare business to achieve relative homogeneity of the sample, considering the implications of their environmental performance. Moreover, our analysis is deliberately confined to U.S. corporations, acknowledging that geographical variations significantly influence both the interpretation and execution of sustainable reporting practices. This focus allows for a more controlled examination of the impacts of gender diversity within a specific regulatory and cultural context. In contrast, countries such as the United Kingdom, Australia, Canada, Germany, Hong Kong, Singapore, Belgium, and Italy typically adopt a principles-based strategy in their sustainability reporting. This international diversity in approach underscores the need for our study’s specific focus on the U.S. context, where the regulatory environment and corporate governance norms may yield different implications for the role of gender diversity in sustainability reporting.

Furthermore, our study makes a significant contribution to the literature on gender diversity by employing a multifaceted methodology for measuring gender diversity. While the percentage of women directors on the board remains a foundational metric that is recognized for its validity and widespread usage, we enhanced this traditional measure with the inclusion of the Blau and Shannon diversity indices. This approach diverges from previous studies like Tingbani et al. (2020), who focused solely on the percentage of women directors and their impact on greenhouse gas voluntary disclosures, and Bananuka et al. (2022), who examined the number of women directors on boards in relation to compliance with the Global Reporting Initiative. By integrating these additional diversity measures, our study provides a more comprehensive view of gender diversity’s impact. This not only aligns with our objective to offer a richer, more nuanced analysis but also positions our research to potentially uncover insights that may be overlooked when relying exclusively on conventional gender diversity measures. In doing so, we contribute a novel perspective to the ongoing discourse on the role of gender diversity in corporate sustainability, particularly within the U.S. healthcare industry.

We used 646 observations derived from 57 healthcare companies over the period of 2010–2021. Using several empirical analyses that address correlation, heterogeneity, and omitted variables, we found that gender has a positive and significant effect on sustainability for the U.S. healthcare industry. This supports our argument that directors in the boardroom impact sustainability reporting in the U.S. healthcare industry. This is consistent with the belief that a women’s presence in the boardroom has an impact on corporate reporting. In addition to its academic relevance, this study also has practical implications. For instance, an increased understanding of the rationale for gender equality sustainability reporting may improve company reporting and stakeholder desire for this information. Therefore, to strengthen corporate reporting systems, authorities and policymakers should pursue measures to change board membership. Moreover, the findings imply that investors who want to maximize their wealth should invest in firms with stronger board characteristics. In particular, board features such as gender diversity could be crucial in this respect. Furthermore, increasing access to this information may have a positive impact on public policy, addressing existing levels of inequality between men and women (Miles 2011). Therefore, the results of the current study highlight the necessity for regulators and policymakers to promote corporate governance standards that strive to boost the representation of women directors to attain a balanced gender composition in boardrooms.

The next chapters of the paper are as follows: the literature review, which examines the previous literature and the development of the hypothesis; the third chapter, which discusses the research methodology, sample, and variables of this study; the empirical findings, which are reported in the fourth chapter; and the final part, which summarizes and concludes the research findings.

2. Literature Review and Hypothesis Development

In recent years, the literature has recognized that gender diversity on the board of directors plays an important part in enterprises’ choices surrounding sustainability participation (Guping et al. 2020). Board diversity has the great potential to alter decision-making and also possibly understanding of the business environment because it brings more unique perspectives, with unconventional attitude toward various challenges (Adams et al. 2015). Ben-Amar et al. (2017) underscored the increased demand from stakeholders for female representation on the boards, which implies that women’s distinctive perspectives during board meetings are highly valued. Bala et al. (2020) support these claims, indicating that gender-based psychological differences can be diminished and better decision making will follow if equal chances are created for both genders. Issa et al. (2022) further reinforced this idea mentioning the vital contribution that gender diversity makes while improving business decisions.

Furthermore, women directors are more likely to have social responsibility projects and exhibit different leadership styles, educational backgrounds, and communication styles (Nielsen and Huse 2010). They are also more likely to demonstrate different priorities than male directors in their management approaches (Adams and Funk 2012). The diversity of board members, encompassing varied perspectives, experiences, and skills, is instrumental in shaping a more holistic understanding of the multifaceted environmental, social, and governance issues that healthcare companies face (Hakovirta et al. 2020; Bitar 2022). Board members from diverse backgrounds contribute different viewpoints on critical issues, such as patient care ethics, environmental sustainability, and community impact. This variety of perspectives is crucial in identifying and addressing the broad spectrum of sustainability challenges unique to the healthcare sector. Directors with diverse professional and personal experiences contribute a wealth of knowledge that can enhance the board’s collective understanding of complex ESG issues (Issa and Zaid 2023). For instance, individuals with backgrounds in environmental science or public health can provide valuable insights into the ecological and social implications of corporate decisions. Moreover, women directors are less likely to take legal action or harm their reputations (Helfaya and Moussa 2017).

Recent scholarly work has shed light on the pivotal role of corporate board composition in fostering social sustainability reporting within the healthcare sector. Adamu and Tyasari (2022) discovered that firms with higher numbers of directors, including at least one female board member, are more inclined to engage in social sustainability activities. However, they observed that the presence of nonexecutive directors does not significantly influence sustainability-related initiatives. Extending this perspective, Pucheta-Martínez and Gallego-Álvarez (2018) argued that a director’s decisions, particularly regarding CSR, stakeholder engagement, and strategic CSR actions, are crucial determinants of a sustainable business environment. In the same context, Zahid et al. (2020) observed that the inclusion of female directors is a vital aspect of boardroom diversity, contributing significantly to the advancement of corporate goals (Ben-Amar et al. 2017) and sustainability initiatives (Issa et al. 2022). During deliberations, female directors often actively engage in and make substantial contributions to discussions impacting the firm. For instance, Ittonen et al. (2010) found that female directors could influence a reduction in audit fees by intensifying monitoring services. This aligns with the stakeholder theory that suggests that firms with female board members are perceived as more CSR-oriented and stakeholder-focused (Pucheta-Martínez and Gallego-Álvarez 2018). Furthermore, numerous investigations have underscored the positive impact of female board directors on CSR reporting. Sarhan and Ntim (2019), in their study on the MENA market, found that companies with gender-diverse boards report more CSR activities than those without female directors. This correlation between female board members and increased CSR disclosure has been consistently noted in various studies (Harjoto et al. 2015; Issa et al. 2022; Pucheta-Martínez and Gallego-Álvarez 2018; Zahid et al. 2020), which highlighted the strong link between gender diversity and CSR transparency. Accordingly, based on these variances, gender diversity may influence sustainability reporting.

Male and female directors have different ethical obligations, according to Adams et al. (2015). Additionally, females in managerial positions are more likely to focus on stakeholders and show concern about ethical standards and socially responsible behavior. They are also more willing to make an effort to mitigate perceived risks. They have a more trusting connection than male directors and may place more focus on increasing interaction with stakeholders and eliminating information asymmetry.

Empirical evidence supports our assumptions of gender diversity influencing sustainability reporting. The relationship between women in the boardroom and company performance is still a topic of significant research; however, the results are frequently conflicting (Brahma et al. 2021). Nevertheless, studies on the impact of gender diversity suggest that board diversity enhances financial reporting transparency and reduces information asymmetry (Abad Diaz et al. 2017). Nielsen and Huse (2010) revealed that companies in the telecommunications sector with gender-diverse boards showed enhanced innovation and openness to new ideas. The authors suggest that women bring different life experiences and viewpoints that enrich the board’s collective understanding and problem-solving capacity. Joecks et al. (2013) indicated that retail companies with higher female representation at the board level were more likely to adopt socially responsible practices. Post and Byron (2015) found a positive relationship between board diversity and a firm’s value and performance in the technology industry.

A recent empirical study revealed that board gender diversity may have an impact on reporting quality, compliance, and ethical behavior. For instance, Amorelli and García-Sánchez (2021), Yarram and Adapa (2021), and Yasser et al. (2017) showed an association between CSR and gender diversity. A study by Liao et al. (2015a), examined how big corporations in the U.K. with higher gender diversity in their boardrooms are more likely to provide thorough reports on greenhouse gas emissions. Interest groups and government efforts are putting growing pressure on organizations to increase the number of women in their boardrooms. The gender quota laws that have been passed in various European Union countries serve as a striking example, as well as the international movement of gender mainstreaming to promote gender equality (Casaca et al. 2022; Ahrens and Scheele 2022). In the European setting, significant cases include Norway’s quota law that was introduced in 2008, which requires female participation of at least 40% on the corporate boards (Sweigart 2012). Similarly, the laws in France, Italy, Belgium and also Germany mandate minimum quotas of female board members. The academic community is actively engaged in studying the influence of gender diversity in business and, more specifically, trying to understand why some organizations perform much better than others.

A recent study has recognized the impact of women on boards, demonstrating that women are more sensitive to social and environmental issues (Konadu et al. 2022). Moreover, numerous studies examined the relationship between gender diversity and companies’ social performance (Alazzani et al. 2017; Elmagrhi et al. 2019) and CSR reporting (Saggese and Sarto 2022).

Traditional measures of board gender diversity, such as the percentage of female directors, offer a somewhat limited perspective on diversity. In contrast, the Blau and Shannon indices provide a deeper, more nuanced understanding by capturing not only the presence of women but also the richness and balance of gender representation on boards. This approach is vital for comprehending how diversity in board composition leads to a variety of perspectives and decision-making processes. While only a few studies have specifically explored the impact of gender diversity on sustainability reporting using indices like Blau and Shannon, they have been utilized in broader research on corporate governance and performance. For instance, Harrison and Klein (2007) and Joecks et al. (2013) employed these indices to assess the multifaceted nature of board diversity. Al-Shaer and Zaman (2016) discovered that boards with gender diversity, as measured using the Shannon and Blau indices, are linked to higher-quality sustainability reports. They also found that independent female directors have a more significant effect on the quality of sustainability reporting than their male counterparts. Singh et al. (2021) argued for the use of the Blau and Shannon indices to measure gender-diverse boards for more robust data analysis results, finding an insignificant yet positive relationship between gender-diverse boards and sustainability. Similarly, Zaid et al. (2020a) observed that boards with gender diversity, measured using the Shannon and Blau indices, have a positive and insignificant impact on corporate sustainability-related actions.

The majority of this research is empirical, with varied theoretical approaches based on the business literature. Our study identified three primary theoretical frameworks that influence empirical studies on the relationship among corporate governance, gender diversity, and sustainability reporting. The most often employed theories were resource dependence theory, agency theory, and stakeholder theory.

The board of directors, according to agency theory, is a significant instrument for supervising and controlling managerial activities, as well as ensuring the shareholders’ interests (Bathala and Rao 1995). A board of directors are not involved in the day-to-day operations and must create an objective, unbiased judgment on the firm’s performance. To do so, they must preserve their professional image overseas (Martinez-Diaz 2009). However, gender diversity adds to a board’s independence by favoring more effective monitoring and management independence, as well as a stronger application of ethical behavior (García-Sánchez et al. 2015; Wahid 2019; Campbell and Mínguez-Vera 2008).

In creating the paradigm for most gender diversity and sustainability research, agency theory is frequently coupled with stakeholder theory (Shehadeh et al. 2021). It broadens the agency issue to include a multilateral connection with several stakeholders. Independent directors have deeper connections with stakeholders and are more likely to satisfy the demands of various stakeholders (Jizi 2017). Independence as a result of gender diversity promotes relationship management with various stakeholders by demonstrating greater regard for their needs. Accordingly, a larger number of women in the boardroom is more likely to support strategic decision-making that considers the stakeholders’ interests (Amorelli and García-Sánchez 2021).

Resource dependence theory suggests that resourceful, diverse boards may encourage more environmental disclosure because they are more inclined to work on behalf of stakeholders. Furthermore, academics, investors, and regulators may be interested in the findings. Academic scholars need to learn about board gender diversity, sustainability, and tax evasion. Having female members on the board improves sustainability reporting for investors. The findings encourage policymakers to emphasize the relevance of female positions to promote company involvement in sustainability reporting (Powell and Rey 2015). Resource dependence theory, as mentioned by Tyrowicz et al. (2020), investigates how boards seek to decrease uncertainty by choosing directors who can maximize access to important resources.

According to stakeholder theory, companies must be responsible not only to core stakeholders but also any secondary related stakeholders, such as local governments, social communities, subcontractors, and nongovernmental organizations (NGOs). As a result, successfully dealing with stakeholders who have various forms and sources of legitimacy is a critical issue from a business standpoint (Manita et al. 2018). Furthermore, companies aim to obtain legitimacy from stakeholders by sharing environmental, social, and governance (ESG) information (Cho and Patten 2007). In this approach, sustainability reporting is considered a technique of responding to and managing the many stakeholders’ demands.

To summarize, these paradigms provide the theoretical framework that is most commonly employed in empirical studies to support the ways in which board diversity might improve sustainability reporting. Multiple arguments for including women on boards have been proposed, including the fact that females have higher moral standards and are more socially sensitive than males (Cicchiello et al. 2021).

Based on these theoretical assumptions, empirical data reveals a beneficial association between the presence of female directors in boardrooms and sustainability reporting (Nel et al. 2022). Other research, however, has found no relation between the presence of female directors and sustainability or reporting methods (Gull et al. 2022b). Furthermore, Li et al. (2017) argue that the participation of women on boards is most helpful when it is in proportion to the representation of males. According to Nuber and Velte (2021), the beneficial relationship between gender diversity and reporting is dependent on the existence of a sufficient number of female directors.

Despite the expanding body of research on sustainable practices, its link to gender diversity remains an untapped territory in the U.S. healthcare business. Much consideration should be given to the relationship between these two notions, which are inextricably linked. As a result, in keeping with the prior literature analysis and its conclusions, this research investigated the influence of board gender diversity on sustainability reporting in the U.S. healthcare business by positing the following hypothesis:

H1. 

There is a significant positive impact of gender diversity on sustainability reporting in the U.S. healthcare industry.

3. Sample, Model, and Variables of Study

We used the Refinitiv Eikon Database for data collection, which included accounting and market data for listed corporations that operate globally. We requested data for the businesses listed in the S&P 500 index from 2010 to 2021. We then used 2010 as the starting period for this study to avoid the influence of the 2008 financial crisis on the company’s disclosure. We accounted for both Refinitiv Eikon sector categorization and company size when selecting firms in the healthcare industry. Furthermore, we manually checked the classification for validity by adjusting the convergence of industry classification for each business in our sample. We originally acquired 793 firm-year observations for 61 healthcare businesses under the aforementioned request parameters. After removing the records with missing data, we were able to obtain a panel of 646 firm-year observations for 57 healthcare businesses.

Table 1. Sample of this study.

	# Firms	Firm-Year Observations
S&P 500	500	6539
Healthcare industry (TRBC Economic Sector Name)	61	793
After cleaning missing data	57	646

shows the composition of our sample.

Therefore, this study depended on the selected sample of unbalanced panel data for all healthcare companies listed in the S&P 500, which includes 646 observations derived from 57 healthcare companies over the period of 2010–2021. Refinitiv Eikon was utilized to collect the data for this investigation.

This research investigated the influence of gender diversity on the sustainability reporting of healthcare firms in the United States. The notion of sustainability reporting is a constant worldwide push, and businesses must participate in this report. The dependent variable (sustainable report) was assessed using Refinitiv Eikon’s (ESG) score. Refinitiv ESG is a significant ESG rating service that provides “one of the industry’s most comprehensive ESG datasets” (Refinitiv 2023). Refinitiv ESG ratings have been referenced in more than 1200 academic papers during the past 15 years. Moreover, the Refinitiv ESG data figures in an ‘ESG White Paper’ published at the 2019 World Economic Forum and it is identified as one of three major ranking providers within a recent OECD report (Boffo and Patalano 2020; Alkayed et al. 2023).

The ESG score in Refinitiv Eikon is a comprehensive measure that evaluates a company in three critical areas: environmental, social, and governance (ESG). This scoring system is based on the analysis of open source data that was collected from annual reports, CSR reports company websites and NGO websites. Energy consumption, waste management and also emission metrics fall under the environmental component. The social aspect measures several variables such as labor standards, community relations and human rights policies. The governance element looks at the corporate management, board structure and also business ethics.

In the context of our research, the ESG score justifies its use as a proxy for sustainability reporting since this score is quite comprehensive. It encompasses a wide variety of sustainability practices and disclosures that closely mirror the idea of sustainability reporting. Sustainability reporting is a process of revealing data on environmental, social and governance activities or outcomes; this is exactly what ESG score represents. Thus, the ESG score from Refinitiv Eikon enables a comprehensive and multi-dimensional assessment of corporate sustainability practices as an appropriate metric for evaluating gender diversity effect on sustainability reporting in healthcare sector.

To test the robustness of our data analysis, we assessed the independent variable, gender diversity, using three different metrics. These metrics included the percentage of women directors on the board and the Blau and Shannon diversity indices. When studying the impact of board gender diversity on sustainability reporting, we highlighted the necessity of controlling corporate governance (Zaman et al. 2011). Furthermore, previous studies have suggested that larger boards are more likely to become diverse and consist of many directors from various backgrounds which may cause the firm focusing on sustainability issues (Rao and Tilt 2016). The Blau index (Blau 1977) is given by the formula- 1 − ∑(pi2), where pi represents the proportion of each gender on the board. This index measures the probability that two randomly selected board members will be of different genders, this particular index reports a higher score correspond to greater diversity. The Shannon index, a measure based on the idea of entropy within the information theory, is computed by −∑(pi × log(pi)). It accounts for both the richness and evenness of gender representation on the board, with higher values indicating more diversity.

We include board size, which is determined by the total number of directors. Moreover, increasing the number of independent directors is connected with lower agency expenses, improved legitimacy, and a stronger interest in sustainability (Terjesen et al. 2016). Therefore, we added board independence, which was measured using the proportion of independent directors to board size. The average attendance at board meetings can impact the amount of transparency, quality of information presented, and efficacy of board decision-making (Van den Berghe and Levrau 2004). In addition, we included the board meeting attendance average as another governance variable (Sekarlangit and Wardhani 2021). We also controlled firm variables, namely, firm size, profitability, and growth opportunity (Rodríguez-Ariza et al. 2012; Hasanuddin et al. 2021). The model of study was as follows:

ESG = α + β1GD + β2BS + β3IND + β4BM + β5Size + β6PR + β7LEV + β8GR + ℇ

• ESG = sustainability reporting measured using the ESG score from Refinitiv Eikon.
• GD = board gender diversity measured using three alternatives: percentage of female directors on the board and the Blau and Shannon indices of diversity.
• BS = the number of directors on the board.
• IND = the percentage of independent directors on the board.
• BM = board meeting attendance average.
• Size = firm size measured using the log of total assets.
• PR = firm profitability measured using ROE.
• LEV = leverage measured using long-term debt to total assets.
• GR = growth opportunity measured using the market-to-book ratio.

4. Findings and Hypothesis Testing

4.1. Descriptive and Correlation Analysis

In

Table 2. Descriptive statistics.

	Mean	Median	S.D.	Min	Max
ESG Score	0.553	0.576	0.204	0.075	0.930
Firm Size	10.110	10.070	0.600	8.465	11.370
ROE	0.385	0.212	3.167	−5.692	77.020
M/B Ratio	6.116	3.518	10.360	0.682	125.800
Leverage	0.351	0.331	0.236	0.000	1.585
Board Size Log	1.010	1.000	0.084	0.699	1.230
Gender Diversity (%)	0.216	0.222	0.093	0.000	0.500
Gender Diversity (Dummy)	0.980	1.000	0.142	0.000	1.000
Gender Diversity (Blau)	0.322	0.346	0.104	0.000	0.500
Gender Diversity (Shannon)	0.495	0.530	0.130	0.000	0.693
Independent Board Members %	0.847	0.889	0.089	0.400	1.000
Board Meeting Attendance Average	79.300	75.000	8.441	75.0	100.0
Board Size	10.410	10.000	1.998	5.000	17.000

, we present a comprehensive descriptive analysis of the variables used in our study. The ESG Score, central to our study, exhibited a mean of 0.553 and a median of 0.576, with a standard deviation of 0.204, indicating moderate variability among companies in the U.S. healthcare industry. Firm size showed an average of 10.110, with a relatively narrow standard deviation, which suggests less variability. Return on equity (ROE) displayed a notable range, from −5.692 to 77.020, reflecting diverse financial performance. The market-to-book (M/B) ratio further underscored this diversity, with a wide range extending up to 125.800. Leverage ratios, board size metrics, and gender diversity measures (both as percentages and through the Blau and Shannon indices) also exhibit varied distributions, offering a detailed view of the corporate governance landscape in the sector. Notably, the independent board members percentage averaged at 0.847, which is indicative of a high degree of board independence across the sample. These descriptive statistics provided a foundational understanding of the dataset, which was crucial for interpreting the subsequent econometric analyses.

Table 3. Correlation analysis.

	Mean	SD	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)
(1) ESG Score	0.55	0.20	1
(2) Firm Size	10.11	0.60	0.663 **	1
(3) ROE	0.38	3.17	0.042	−0.049	1
(4) M/B Ratio	6.12	10.36	−0.068	−0.183 **	0.309 **	1
(5) Leverage	0.35	0.24	0.077	0.259 **	0.110 **	0.255 **	1
(6) Board Size Log	1.01	0.08	0.447 **	0.560 **	−0.030	−0.088 *	0.162 **	1
(7) Gender Diversity (%)	0.22	0.09	0.371 **	0.267 **	0.012	0.048	−0.033	0.061	1
(8) Gender Diversity (Blau)	0.32	0.10	0.411 **	0.298 **	0.019	0.054	−0.051	0.103 *	0.975 **	1
(9) Gender Diversity (Shannon)	0.49	0.13	0.409 **	0.296 **	0.021	0.054	−0.059	0.112 **	0.949 **	0.992 **	1
(10) Independent Board Members %	0.85	0.09	0.429 **	0.196 **	−0.004	−0.027	−0.088 *	0.278 **	0.170 **	0.200 **	0.215 **	1
(11) Board Meeting Attendance Average	79.30	8.44	0.151 **	0.095 *	0.091 *	−0.014	−0.036	−0.036	0.022	0.012	0.002	−0.088 *	1

** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).

presents the findings of the correlation analysis of the variables of study, as well as the descriptive analysis for each variable. The findings clearly show that there is a significant positive relationship between ESG score and the three measurements of gender diversity. This indicates that the existence of women in the boardroom will enhance sustainability reporting.

The results in Table 3 also show that there is a positive and significant relation between ESG score and firm size, indicating that larger firms have higher sustainability reporting. The proponents of sustainability reporting have argued that encouraging the disclosure of ESG will be advantageous to both organizations and stakeholders. The results also show that there is a significant positive relationship between ESG score and board size, as well as between independent board members and average board meeting attendance.

Table 4. Independent sample t-test.

		N	Mean	Std. Deviation	Std. Error Mean	Mean Difference	t	Sig.
ESG Score	Without a female board director	12	0.36370	0.12641	0.03649	−0.20278	−5.419	0.000
	With a female board director	574	0.56648	0.19857	0.00829

presents the findings of the independent samples t-test that aimed to find any significant differences in the ESG score among firms with or without female directors in the boardroom. The results show that there are only 12 year-firm observations without female directors compared with 574 year-firm observations with female directors on the board. Regardless of the large differences in the sample size between the two groups (firms with and without female directors in the boardroom). The independent samples t-test findings show that the average ESG score for businesses with female board members (0.56648) is higher than that of businesses without female board members (0.3637).

This supports the argument that the presence of female directors in the boardroom enhances sustainability reporting in the U.S. healthcare industry. Gender diversity on corporate boards is associated with better social responsibility. One female board member may make a significant difference (Zaichkowsky 2014). The distinct contribution of female directors can be attributed to several factors. Research suggests that women often provide diverse perspectives in leadership roles, which are shaped by differences in personality, educational background, and professional experience compared with their male counterparts. These differences can manifest in unique communication styles, leadership approaches, and ethical sensitivities. Specifically, women are frequently noted for their empathic approach and heightened sensitivity to social and ethical concerns, which can translate into a stronger focus on socially responsible practices in corporate governance (Kennedy and Kray 2014).

4.2. Testing Hypothesis and Findings

The main goal of the current study was to analyze the impact of gender diversity on sustainability reporting. Several models were used in our main hypothesis testing, as well as in the robustness check, namely, OLS, GLS, fixed, heteroskedasticity corrected (HCM), and Tobit models. The next table presents the results for the OLS, GLS, and fixed effects models.

Table 5. Regression analysis. Table 5 presents the regression analysis results of this study. Models 1, 2, and 3 utilized a pooled ordinary least squares (OLS) approach, whereas Models 4, 5, and 6 applied fixed effects. The results at the end of Models 4–6 include the Hausman test, which supported the use of fixed effects over random effects. Notably, the outcomes from the unreported random effects model and the generalized least squares (GLS) model yielded consistent results with those reported. Each model incorporated controls for year-effect, which is essential to account for any temporal influences on the data. The significance levels in the table are indicated as follows: *** for significance at the 1% level, and ** for 5%. The numbers presented in the table correspond to coefficients, and these are accompanied by p-values, which are provided in parentheses.

Dependent Variable: ESG Score	(1)	(2)	(3)	(4)	(5)	(6)
	OLS			FE
R-squared	0.617	0.620	0.620	0.877	0.879	0.880
Adjusted R-squared	0.603	0.606	0.606	0.640	0.646	0.648
F(24, 20,528)	44.303 ***	44.874 ***	44.880 ***	44.329 ***	45.186 ***	45.520 ***
p-value (F)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Year-Effect	Yes	Yes	Yes	Yes	Yes	Yes
const	−2.138 ***	−2.131 ***	−2.149 ***	−1.235 ***	−1.180 ***	−1.201 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Firm Size	0.168 ***	0.165 ***	0.165 ***	0.157 ***	0.150 ***	0.150 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
ROE	0.004 **	0.003 **	0.003 **	0.001	0.001	0.001
	(0.042)	(0.046)	(0.048)	0.725	0.716	0.741
M/B Ratio	0.001	0.001	0.001	0.002 **	0.001 **	0.002 **
	0.762	0.686	0.677	(0.016)	(0.018)	(0.016)
Leverage	−0.074 **	−0.068 **	−0.068 **	−0.196 ***	−0.190 ***	−0.191 ***
	(0.023)	(0.038)	(0.037)	(0.000)	(0.000)	(0.000)
Board Size Log	0.223 ***	0.220 ***	0.216 ***	−0.213 ***	−0.228 ***	−0.234 ***
	(0.006)	(0.006)	(0.007)	(0.013)	(0.008)	(0.006)
Independent Board Members %	0.630 ***	0.625 ***	0.622 ***	0.328 ***	0.313 ***	0.305 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Board Meeting Attendance Average	0.003 ***	0.003 ***	0.003 ***	0.003 ***	0.003 ***	0.003 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Gender Diversity (%)	0.240 ***			0.190 ***
	(0.001)			(0.004)
Gender Diversity (Blau)		0.255 ***			0.233 ***
		(0.000)			(0.000)
Gender Diversity (Shannon)			0.204 ***			0.196 ***
			(0.000)			(0.000)
Hausman test				57.153 ***	57.799 ***	58.054 ***
				(0.000)	(0.000)	(0.000)

presents a comprehensive regression analysis aimed at understanding the impact of gender diversity on sustainability reporting in the U.S. healthcare industry. In this analysis, Models 1, 2, and 3 adopted a pooled OLS approach, whereas Models 4, 5, and 6 implemented fixed effects. The choice to employ these models was driven by the need to address this study’s hypotheses thoroughly. The Hausman test results, presented at the end of Models 4–6, significantly supported the use of fixed effects over random effects, affirming our methodological choice. It is noteworthy that the unreported outcomes from the random effects model and the generalized least squares (GLS) model aligned with the findings from the reported models, reinforcing the consistency and robustness of our results. Each model in this table accounts for year-effect to ensure that the time element is adequately considered, addressing a vital aspect of the panel data used in this study.

Regardless of the models used, the findings in Table 5 confirm that there is a significant positive impact of gender diversity (percentage of women) on sustainability reporting, in which the results of coefficients for OLS, GLS, and fixed effects models are significant at 1%. Moreover, measuring gender diversity using Blau or Shannon indices of diversity confirmed the finding that the presence of female directors in the boardroom enhances sustainability reporting in U.S. healthcare companies. The significant women in the boardroom are more concerned with social and ethical concerns, corporate philanthropy, and social behavior and responsibility.

Additionally, increased female boardroom involvement is connected with considerably higher values of investments related to sustainability and improved reporting efficiency. Furthermore, women directors are more stakeholder-oriented; thereby, they improve the boards’ capacity to identify and address the needs of a variety of stakeholder groups (Pucheta-Martínez et al. 2016).

The presence of women on corporate boards improves the efficacy of the companies’ supervision and the efficiency of social disclosure. This increases public impressions of the board’s legitimacy and integrity, promotes the reliability of corporate reporting, and strengthens the company’s reputation.

Our empirical findings are consistent with previous empirical and theoretical investigations. In comparison to all-male boards, women can promote better-informed choices and provide new viewpoints to boards (Rao and Tilt 2016). Women have an increased effect on decision-making procedures as the number of women on boards grows. This is due to the moral effect on human systems (Cicchiello et al. 2021).

According to Bernardi et al. (2009), having a larger ratio of women on the board is connected with being named one of the “World’s Most Ethical Companies” if the company is a Fortune 500 company. Moreover, according to Ben-Amar et al. (2017), several characteristics of worker diversity impact a company’s commitment to combating climate change. They discover that the presence of women is favorably and strongly associated with commitment to climate change.

On the other hand, our empirical results contrast with earlier research. For instance, Prado-Lorenzo and GarciaSanchez (2010), stated that for S&P 500 companies, gender diversity has no appreciable impact on the dissemination of GHG information.

Furthermore, our findings are confirmed by stakeholder theory, because it is advocated that boardroom gender diversity pronouncements increase sustainability reporting based on stakeholder theory postulates. Furthermore, it is suggested that women provide a broad professional perspective. They are consistent and participatory, which enhances business financial performance by deepening the awareness of client demands and the marketplace. This innovative and diverse perspective boosts business sales and profits by improving the quality of their corporate strategy, goods, and services.

For our control variables, the results in Table 5 indicate a significant positive impact of firm size, board size, independence, and meeting attendance average on sustainability reporting, which is consistent with previous empirical studies.

4.3. Robustness Check

To assess the robustness of the results, we re-estimated our model in Table 4 using the heteroskedasticity corrected (HCM) and Tobit models. The Tobit regression model is a frequently used tool for modeling censored variables in econometrics research, in which the coefficient estimates from the Tobit model display superior performance compared with estimates from OLS regression. As in Table 4, the dependent variable was the ESG score (from Refinitiv Eikon) for 57 U.S. healthcare companies. The independent variable of our model was gender diversity (percentage of female directors on board and Blau and Shannon indices). We also used several control variables that covered both corporate governance and internal firm factors.

The results in

Table 6. Robustness check. Table 6 presents the robustness check of our regression analysis on the ESG score as the dependent variable. Models 1–3 used a heteroskedasticity corrected model (HCM), whereas Models 4–6 used a Tobit model. The significance levels are indicated by asterisks, where *** denotes 1%, ** signifies 5%, and * represents 10%. The numbers in the table are coefficients, and p-values are provided in parentheses for clarity on the statistical significance.

Dependent Variable: ESG Score	(1)	(2)	(3)	(4)	(5)	(6)
	HCM			Tobit
R-squared	0.782	0.774	0.778
Adjusted R-squared	0.774	0.766	0.769
F(24, 20,528)	98.962 ***	94.461 ***	96.189 ***	873.944 ***	885.201 ***	885.337 ***
p-value (F)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Year-Effect	Yes	Yes	Yes	Yes	Yes	Yes
const	−2.152 ***	−2.160 ***	−2.171 ***	−2.138 ***	−2.131 ***	−2.149 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Firm Size	0.172 ***	0.171 ***	0.173 ***	0.168 ***	0.165 ***	0.165 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
ROE	0.003 ***	0.003 ***	0.003 ***	0.004 **	0.003 **	0.003 **
	(0.000)	(0.000)	(0.000)	(0.038)	(0.041)	(0.043)
M/B Ratio	0.001	0.001	0.001	0.001	0.001	0.001
	0.867	0.821	0.794	0.757	0.680	0.672
Leverage	−0.050 *	−0.051 *	−0.064 **	−0.074 **	−0.068 **	−0.068 **
	(0.054)	(0.056)	(0.018)	(0.020)	(0.034)	(0.033)
Board Size Log	0.248 ***	0.248 ***	0.219 ***	0.223 ***	0.220 ***	0.216 ***
	(0.000)	(0.000)	(0.000)	(0.005)	(0.005)	(0.006)
Independent Board Members %	0.542 ***	0.542 ***	0.554 ***	0.630 ***	0.625 ***	0.622 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Board Meeting Attendance Average	0.003 ***	0.003 ***	0.003 ***	0.003 ***	0.003 ***	0.003 ***
	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)	(0.000)
Gender Diversity (%)	0.187 ***			0.240 ***
	(0.006)			(0.000)
Gender Diversity (Blau)		0.210 ***			0.255 ***
		(0.001)			(0.000)
Gender Diversity (Shannon)			0.172 ***			0.204 ***
			(0.000)			(0.000)

confirm our findings of a significant positive impact of gender diversity on sustainability reporting, in which the results of coefficients for a percentage of female directors using the heteroskedasticity corrected (HCM) and Tobit models are significant at 1%. Moreover, measuring gender diversity using Blau or Shannon indices of diversity confirmed the same findings that female directors in the boardroom enhances sustainability reporting in U.S. healthcare companies.

5. Conclusions

This study investigated the impact of gender diversity on U.S. healthcare industry sustainability reporting over the period of 2010–2021. We used Refinitiv Eikon to collect the needed data from all healthcare companies listed in the S&P 500. Therefore, this study depended on 646 observations derived from 57 healthcare companies over the period of 2010–2021. Using several empirical analyses that address correlation, heterogeneity, and omitted variables, we found that all our board gender diversity measures (percentage of female directors on board and the Blau and Shannon indices) have a positive and significant impact on sustainability reporting in the U.S. healthcare industry. This supports the claim that the presence of female directors in the boardroom enhances sustainability reporting in the U.S. healthcare industry. These results are still consistent after controlling both corporate governance (board size, board independence, board meeting attendance average) and internal firm factors (firm size, profitability, growth opportunity, leverage). Moreover, our findings are still consistent when using different models OLS, GLS, fixed, heteroskedasticity corrected (HCM), and Tobit models.

Our analysis, which was robust across multiple statistical models, aligns with the growing consensus that the inclusion of women in boardrooms significantly influences corporate transparency and ethical reporting. Furthermore, this relationship persists even when considering various corporate governance factors and internal firm dynamics. Our research contributes to the burgeoning discourse on the importance of diversity and governance in addressing sustainability and accountability issues at the corporate level.

The inclusion of female directors in boardrooms, particularly in the U.S. healthcare industry, carries significant implications for sustainability reporting. Women’s unique awareness of regulatory trends and societal expectations can drive a proactive and forward-looking approach to corporate governance and reporting. This includes a proactive stance towards compliance, adaptation to changing reporting requirements, leadership in sustainable practices, and the ability to anticipate industry trends. These contributions of female directors can significantly enhance sustainability reporting, aligning it with both current and future standards and positioning healthcare companies as leaders in sustainable practices.

Additionally, our findings add to the expanding body of research emphasizing the relevance of diversity and governance when considering sustainability and assurance challenges at the business level. This study provides useful guidelines to public-traded companies, regulatory agencies, and professionals on increasing the representation of female directors in the boardrooms, as well as improving compliance with social sustainability by the effective involvement of females in the boardrooms.

Healthcare companies are recommended to increase the representation of women in their boardrooms, recognizing the value they bring in enhancing sustainability practices. Regulatory agencies could focus on formulating policies that encourage gender diversity in corporate governance, acknowledging its positive impact on sustainability reporting. For professionals and stakeholders in the industry, our study highlights the significance of female involvement in decision-making processes, particularly in fostering socially responsible and sustainable business practices.

This confluence of diverse perspectives, experiences, and skills is especially significant in the healthcare sector, where the outcomes of corporate decisions can have profound ethical, social, and environmental implications. By embracing board diversity, healthcare companies can ensure that their sustainability reporting is robust, nuanced, and aligned with the complex demands of the sector. The U.S. government, in its pursuit of sustainable industrialization and cleaner production, may find these insights particularly pertinent. Emphasizing the recognition and empowerment of women directors could be a strategic move toward achieving enhanced sustainability reporting and overall industry sustainability.

There are several limitations to this study. Initially, the current study focused solely on the gender element of boardroom diversity, leaving out other aspects related to sustainability reporting. Additionally, this study used only quantitative data. In light of these findings, future research might explore additional dimensions of boardroom diversity, as well as a qualitative approach. Finally, future research may consider moderation and mediation variables, such as other features in the board, integrated strategies, and indicators of financial performance.