Female representation on boards and corporate ethical behavior in Latin American companies

Abstract Research Question/Issue Based on the resource dependence theory and the ethics of care theory, this study aims to analyze whether female representation on boards enhances corporate ethics performance in listed companies. Research Findings/Insights Using a study sample composed of 1285 company‐year observations from Argentina, Brazil, Chile, and Mexico during the 2004–2014 period, empirical results reveal a positive effect of female representation in boardrooms over the board's ethical functioning, the conflicts of interest transparency index, the creation of ethics codes, and the adoption of a stakeholder orientation. Moreover, the research evidences a greater effect in some ethical dimensions when women on the board make up a critical mass of three women. Theoretical/Academic Implications This paper motivates the ethical side of corporate governance in a setting where women's rates on top positions are low, corruption and bribery are high, and cultural environment inhibits gender parity in terms of reaching higher positions in an organization. It can be specifically deduced that a higher female representation as board members may have an essential role in establishing and advocating a business ethics culture. Practitioner/Policy Implications For boards, having more female directors can enhance corporate ethical practices. For practitioners and regulators, this study shows that female directors tend to be more ethically responsible, emphasizing the necessity of mitigating gender imbalance on corporate boards.