Audit Committee Gender Diversity, Independence and Firm Value: Evidence from Kenyan Listed Firms

Aims: To examine whether audit committee gender diversity and audit committee independence are associated with firm value among Kenyan listed firms, and whether independence moderates the association between gender diversity and firm value. Study Design: Quantitative longitudinal panel design. Place and Duration of Study: Firms listed on the Nairobi Securities Exchange, Kenya, 2010–2021. Methodology: A balanced panel of 41 listed firms (492 firm-year observations) was constructed from audited annual reports and corporate governance statements. Firm value was measured by Tobin’s Q, gender diversity by the proportion of female audit committee members and independence by the proportion of independent members. Ordinary least squares models with firm and year fixed effects and firm-clustered standard errors were estimated, and robustness was assessed through winsorisation, logarithmic transformation of Tobin’s Q, lagged regressors, exclusion of influential firms and leave-one-firm-out estimation. Results: The coefficient on gender diversity was negative and not statistically significant (β = −0.4538; 95% confidence interval [CI] −1.0158 to 0.1081; P = .11), as were the coefficients on independence (β = −0.1702; 95% CI −1.0658 to 0.7253; P = .70) and on their interaction (β = −0.1453; 95% CI −2.5118 to 2.2211; P = .90). None of the three hypotheses was supported, and the results were robust to all alternative specifications. Independence equalled 100% in 87.4% of observations and did not change for 21 of the 41 firms, which limited the precision of the independence and interaction estimates. Conclusion: Audit committee composition was not associated with firm value among Kenyan listed firms. Compositional requirements are unlikely to increase firm value unless they are accompanied by substantive monitoring, and the wide confidence intervals indicate that the hypothesised relationships cannot be ruled out. Generalisation beyond the Nairobi Securities Exchange requires caution.