Accountability in corporate governance mechanisms and dividend policy nexus: The moderating role of board gender diversity

Abstract

This study investigates how corporate governance mechanisms shape dividend policy in Indonesia, with particular attention to the moderating role of board gender diversity. Using a comprehensive panel dataset of 3,714 firm-year observations from non-financial publicly listed firms, the analysis examines whether board characteristics—namely the size of the board of directors (BOD), the size of the board of commissioners (BOC), and the proportion of independent commissioners—influence dividend payouts. The findings show that larger boards of directors and commissioners are associated with higher dividend distributions, lending support to the outcome model of dividend policy (La Porta et al., 2000), which posits that stronger governance structures promote greater shareholder-oriented financial decisions. Conversely, the proportion of independent commissioners does not significantly affect dividend policy, suggesting that independence alone may be insufficient to influence financial outcomes in the Indonesian context. Furthermore, gender diversity does not significantly moderate the governance-dividend relationship. These insights indicate that board size is a more decisive factor in dividend decision-making than gender diversity. Overall, this study contributes to the corporate governance and dividend policy literature in emerging markets by emphasizing the structural features that shape dividend outcomes and by calling for deeper exploration of gender-inclusive governance in two-tier board systems.