Does the presence of female directors on the board affect the dividend policy? The moderating role of CEO duality

Abstract

Purpose The purpose of this study is to examine the association between women directors on the boards of German nonfinancial companies and their dividend policies, and to assess how chief executive officer (CEO) duality moderates the relationship between board gender diversity and dividend payments. Design/methodology/approach The sample comprises 1,067 observations from 97 German nonfinancial companies across four leading indices, including the DAX 40, MDAX, TecDAX and SDAX. Data for the period from 2010 to 2020 were analyzed using a fixed-effects model with robust standard errors to obtain accurate results. Findings This study provides robust empirical evidence that greater female representation on corporate boards is positively associated with higher dividend payouts. Furthermore, CEO duality strengthens this positive relationship. The results, consistent with resource dependence and agency theories, highlight the role of female directors in attracting external capital, enhancing dividend decision quality and mitigating agency conflicts. Practical implications The findings offer important implications for policymakers, investors and researchers, showing that gender-diverse boards promote more effective dividend policies, even under CEO duality. Mandatory gender quotas may be beneficial in weak shareholder protection environments, as greater board gender diversity enhances monitoring effectiveness, promotes transparency and contributes to more stable dividend policies. Originality/value This study contributes to the literature by providing robust evidence that female representation on corporate boards is positively associated with higher dividend payouts. Dividend policy is measured using the ratio of dividends to total assets, which serves as the primary proxy in the regression analysis.