Central European Business Review 2025, 14(3):65-85 | DOI: 10.18267/j.cebr.387

Does Gender Interact with Financial Reporting Quality?

Ivana Tadić ORCID...1, Željana Aljinović Barać ORCID...2, Jurica Kurtović3
1 University of Split, Faculty of Economics, Business and Tourism, Department of Management, Cvite Fiskovića 5, 21 000 Split, Croatia. Email: ivana.tadic@efst.hr (corresponding author)
2 University of Split, Faculty of Economics, Business and Tourism, Department of Accounting and Audit, Cvite Fiskovića 5, 21 000 Split, Croatia. Email: zbarac@efst.hr
3 University of Split, Faculty of Economics, Business and Tourism, Cvite Fiskovića 5, 21 000 Split, Croatia.

The underrepresentation of women in leadership positions is common evidence of gender inequality. Consequently, the European Commission brought a directive to balance the underrepresentation of women on boards in EU countries. Often, females are presumed to be less favourable for top management positions in successful companies and are faced with different obstacles during their careers. However, they possess many different characteristics, which makes them excellent leaders and may create positive differences in financial reporting quality (FRQ). Croatia still lags behind other EU countries in terms of the share of women within corporate boards; therefore, in this paper, we aim to investigate whether the FRQ differs based on the boardroom’s gender structure. The research is conducted on a sample of listed Croatian companies using univariate and multivariate statistical methods. Two sub-samples were formed in order to capture the effects of the Gender Equality Act (GEA) application. Our results show that women are still underrepresented as board members despite the regulations that introduced a list of activities for gender equality. The gender structure of corporate boardrooms is significantly associated with FRQ, and issuing positive audit opinions is related to tilted-structured management boards, where up to 40% of the board members are women. The contribution of our research is twofold: to investigate the trends and level of gender inequality in leadership positions of Croatian listed companies, and to identify whether the gender structure of top management plays a significant role in a company's FRQ.
Implications for Central European audience: The results of this study provide significant insight into the underrepresentation of women on corporate boards within EU countries. Our findings and recommendations may be of special interest, particularly for Central European countries that share the experience of transition from planned to market economy with Croatia and are characterised by similar institutional, political, economic and financial systems. The topic is crucial in contemporary business, especially following and adapting to the directives brought by the European Commission, pinpointing the issue as a current and future challenge.

Keywords: financial reporting quality; gender stereotyping; leadership styles
JEL classification: M40, M50

Received: July 15, 2024; Revised: August 15, 2024; Accepted: September 12, 2024; Prepublished online: November 16, 2024; Published: July 30, 2025  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Tadić, I., Aljinović Barać, Ž., & Kurtović, J. (2025). Does Gender Interact with Financial Reporting Quality? Central European Business Review, 14(3), 65-85. doi: 10.18267/j.cebr.387
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Abad Díaz, D., Lucas-Pérez, M. E., Minguez-Vera, A., & Yagüe Guirao, J. (2017). Does gender diversity on corporate boards reduce information asymmetry in equity markets? BBQ Business Research Quarterly, 20(3), 192-205. https://doi.org/10.1016/j.brq.2017.04.001. Go to original source...
    2. Akpinar-Sposito, C. (2013). Career barriers for women executives and the glass ceiling syndrome: A case study comparison between French and Turkish women executives. Procedia - Social and Behavioral Sciences, 75, 488-497. https://doi.org/10.1016/j.sbspro.2013.04.053. Go to original source...
    3. Al-Dmour, A. H., Abbod, M., & Al Qadi, N. S. (2018). The impact of the quality of financial reporting on non-financial business performance and the role of organizations' demographic attributes. Academy of Accounting and Financial Studies Journal, 22(1), 1-18. Go to original source...
    4. Ali, M., Kulik, C. T., & Metz, I. (2011). The gender diversity-performance relationship in service and manufacturing organizations. The International Journal of Human Resource Management, 22(7), 1464-1485. https://doi.org/10.1080/09585192.2011.561961. Go to original source...
    5. Aljinović Barać, Ž., & Bilić, M. (2021). The effects of company characteristics on financial reporting quality - The application of the machine learning technique. Ekonomski vjesnik, 34(1), 57-72. https://doi.org/10.51680/ev.34.1.5. Go to original source...
    6. Aljinović Barać, Ž. (2021). Financial reporting quality measurement: Approaches, issues, and future trends. In I. Načinović Braje, B. Jaković, & D. Ferjanić Hodak (Eds.), Proceedings of FEB Zagreb - International Odyssey Conference on Economics and Business (pp. 1-13). https://doi.org/10.22598/odyssey/2021.3. Go to original source...
    7. Alves, S. (2023). Do female directors affect accounting conservatism in the European Union? Cogent Business & Management, 10(2), 1-22. https://doi.org/10.1080/23311975.2023.2219088. Go to original source...
    8. Bodiroga-Vukobrat, N., & Martinović, A. (2017). Study on gender equality policies in Croatia - Update. Policy Department on Citizens' Rights and Constitutional Affairs. Retrieved from https://www.europarl.europa.eu/committees/en/supporting-analyses/
    9. Bolden, R. (2014). What is leadership? Leadership South West Research Report 1, University of Exeter Centre of Leadership Studies, South West of England, Regional Development Agency.
    10. Budiasih, Y., Hartano, C. F. B., Ha, T. M., Nguyen, T., & Usanti, T. P. (2020). The mediating impact of perceived organizational politics on the relationship between leadership styles and job satisfaction. International Journal of Innovation, Creativity and Change, 10(11), 478-495.
    11. Casaca, S. F., Guedes, M. J., Marques, S. R., & Paço, N. (2022). Shedding light on the gender quota law debate: Board members' profiles before and after legally binding quotas in Portugal. Gender in Management: An International Journal, 37(8), 1026-1044. http://dx.doi.org/10.1108/GM-10-2020-0302. Go to original source...
    12. Ciappei, C., Liberatore, G., & Manetti, G. (2023). A systematic literature review of studies on women at the top of firm hierarchies: Critique, gap analysis, and future research directions. Sustainable Accounting, Management and Policy Journal, 14(7), 202-231. http://dx.doi.org/10.1108/SAMPJ-10-2022-0557. Go to original source...
    13. Cicchiello, A. F., Fellagara, A. M., Kazemikhasragh, A., & Monferrà, S. (2021). Gender diversity on corporate boards: How Asian and African women contribute to sustainable reporting activity. Gender in Management: An International Journal, 36(7), 801-820. https://doi.org/10.1108/GM-05-2020-0147. Go to original source...
    14. Da Rocha Grangeiro, R., Silva, L. E. N., & Esnard, C. (2022). I broke the glass ceiling, now what? Overview of metaphors to explain gender inequality in organizations. International Journal of Organisational Analysis, 30(6), 1523-1532. https://doi.org/10.1108/IJOA-07-2020-2281. Go to original source...
    15. De Masi, S., Słomka-Gołębiowska, A., & Paci, A. (2020). Women on boards and monitoring tasks: An empirical application of Kanter's theory. Management Decision, 59(13), 56-72. https://doi.org/10.1108/MD-10-2019-1450. Go to original source...
    16. Din, N. U., Cheng, X., Ahmad, B, Sheikh, M. F, Adedigba, O. G., Zhao, Y., & Nazneen, S. (2021). Gender diversity in the audit committee and the efficiency of internal control and financial reporting quality. Economic Research-Ekonomska istraživanja, 34(1), 1170-1189. https://doi.org/10.1080/1331677X.2020.1820357. Go to original source...
    17. Eagly, A. H., & Karau, S. J. (2002). Role congruity theory of prejudice toward female leaders. Psychological Review, 109(3), 573-598. https://psycnet.apa.org/doi/10.1037/0033-295X.109.3.573. Go to original source...
    18. Egerová, D., & Nosková, M. (2019). Top management team composition and final performance: Examining the role of gender diversity. Business Administration and Management, 2(12), 129-143. https://doi.org/10.15240/tul/001/2019-2-009. Go to original source...
    19. European Commission. (2012, November 14). Questions and Answers: Proposal on increasing gender Equality in the Boardrooms of Listed Companies. Retrieved March 3, 2023, from https://ec.europa.eu/commission/presscorner/detail/ro/MEMO_12_860
    20. European Institute for Gender Equality. (n.d.). Gender Statistics Database. Largest listed companies: presidents, board members and employee representatives. Retrieved March 3, 2023, from https://eige.europa.eu/gender- statistics/dgs/indicator/wmidm_bus_bus__wmid_comp_compbm/datatable
    21. European Institute for Gender Equality. (n.d.). Gender Equality Index. Retrieved May 31, 2024, from https://eige.europa.eu/gender-equality-index/2023/EU
    22. Eurostat Statistics Explained. (n.d.). Gender statistics. Retrieved May 31, 2024, from https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Gender_statistics
    23. Felić, E. (2020). Što je bolje - imati Upravu i Nadzorni odbor ili samo Upravni odbor? Retrieved from https://lidermedia.hr/poslovna-scena/kompanije/sto-je-bolje-imati-upravu-i-nadzorni-odbor-ili-samo-upravni-odbor-129705.
    24. Fritz, C., & van Knippenberg, D. (2017). Gender leadership aspiration: The impact of organizational identification. Leadership & Organization Development Journal, 38(8), 1018-1037. https://doi.org/10.1108/LODJ-05-2016-0120. Go to original source...
    25. Garcia-Blandon, J., Argilés-Bosch, J., & Ravenda, D. (2022). CEO demographics and gender diversity in senior management in large Scandinavian firms. Gender in Management: An International Journal, ahead of print. https://doi.org/10.1108/GM-12-2021-0379. Go to original source...
    26. Golmohammadi Shuraki, M., Pourheidari, O., & Azizkhani, M. (2021). Accounting comparability, financial reporting quality, and audit opinions: Evidence from Iran. Asian Review of Accounting, 29(1), 42-60. https://doi.org/10.1108/ARA-06-2020-0087. Go to original source...
    27. Government of the Republic of Croatia, Ministry of Entrepreneurship and Crafts. (n.d.). Strategy of women entrepreneurship development in the Republic of Croatia 2014-2020. Retrieved, April 18, 2024. from https://ravnopravnost.gov.hr/UserDocsImages/dokumenti/Strategy%20of%20Women%20Entrepreneurship%20Development%20in%20the%20Republic%20of%20Croatia%202014%20-%202020.pdf
    28. Greguletz, E., Diehl, M.-R., & Kreutzer, K. (2019). Why women build less effective networks than men: The role of structural exclusion and personal hesitation. The Travistock Institute of Human Relations - SAGE Journals, 72(7), 1234-1261. https://doi.org/10.1177/0018726718804303. Go to original source...
    29. Halrynjo, S., & Teigen, M. (2024). Gender quotas for corporate boards: Do they lead to more women in senior executive management? Gender in Management: International Journal, 39(6), 761-777. http://dx.doi.org/10.1108/GM-03-2023-0096. Go to original source...
    30. Kanter, R. M. (1977). Some Effects of Proportions on Group life: Skewed sex Ratios and Responses to Token Women. American Journal of Sociology, 82(5), 965-990. Go to original source...
    31. Kompa, K., & Witkowska, D. (2018). Gender Diversity in the Boardrooms of Public Companies in Poland: Change and Implications. Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), 14(1), 79-92. https://doi.org/10.14254/1800-5845/2018.14-1.6. Go to original source...
    32. Krehic & partners (2022). Doing business in Croatia - A Comparative guide. In Deloitte 2022. The Legal 500. Retrieved from https://www.deloitte.com/an/en/services/legal/analysis/doing-business.html
    33. Kurtovic, J. (2020). Zastupljenost žena u upravljanju poduzećima i objektivnost financijskih izvještaja [Master's thesis, menthor Aljinovic Barac, Z., Ekonomski fakultet Split]. REFST - Repozitorij Ekonomskog fakulteta u Splitu.
    34. Larsson, G., Molnar, M. M., Ljungberg, H. T., & Björklund, C. (2022). Leadership through the subordinates' eye: Perceptions of leader behaviors in relation to age and gender. Leadership & Organization Development Journal, 44(1), 18-33. https://doi.org/10.1108/LODJ-07-2021-0333. Go to original source...
    35. Larsson, J., & Vinberg, S. (2010). Leadership behavior in successful organisations: Universal or situation-dependent? Total Quality Management & Business Excellence, 21(3), 317-334. https://doi.org/10.1080/14783360903561779. Go to original source...
    36. Makri, M., Makan, L. T., & Kabra, K. C. (2023). Board characteristics and integrated reporting in an emerging market. Evidence from India. Asian Journal of Accounting Research, 9(1), 1-12. https://doi.org/10.1108/AJAR-02-2022-0050. Go to original source...
    37. Martinović, G., Lerga, L., & Glamuzina, M. (2021). Representation of women in management positions of Croatian companies and public administration and their impact on business performance. In Proceedings of the 9th International OFEL Conference on Governance, Management & Entrepreneurship, Dubrovnik, Croatia, April 23rd-24th, 2021.
    38. Miholić, I., Klačmer Čalopa, M., & Đunđek Kokotec, I. (2022). The Contribution of Women on Corporate Boards: Board's Effectiveness - Focus on ICT. Journal of Information and Organisational Sciences, 46(1), 237-254. https://doi.org/10.31341/jios.46.1.13. Go to original source...
    39. Naciti, V., Noto, G., Vermiglio, C., & Barresi, G. (2022). Gender representation and financial performances: an empirical analysis of public hospitals. International Journal of Public Sector Management, 35(5), 603-621. https://doi.org/10.1108/IJPSM-01-2022-0004. Go to original source...
    40. Nasser, S. (2017). Boxed Women in Public Administration - Between Glass Ceilings and Glass Walls: A Study of Women's Participation in Public Administration in the Arab States. Journal of International Women's Studies, 19(3), 151-171.
    41. Official Gazette of Republic of Croatia. (2023). Companies Act.
    42. Official Gazette of Republic of Croatia. (2017). Gender Equality Act.
    43. Official Gazette of Republic of Croatia. (2014). Strategy of Women Entrepreneurship Development in the Republic of Croatia from 2014 to 2020
    44. Özdevecioğlu, M., Ünlü, O., & Günel, Ö. D. (2008). Does managers' gender matter in employee burnout? In Proceedings of the 8th IAMB Conference, Spain, 1-12.
    45. Özmutaf, N. M., Aktekin, E., Ergani, B., & Çita, K. (2015). The Effects of Innovative Features of Women Managers on their Business Performance: The Food Exporter Companies in Aegean Region Sample. Procedia - Social and Behavioral Sciences, 195, 220-229. https://doi.org/10.1016/j.sbspro.2015.06.353. Go to original source...
    46. Pavic Kramaric, T., & Miletic, M. (2017). Critical mass in the boardroom of Croatian banks. South East European Journal of Economics and Business, 12(1), 22-37. https://doi.org/10.1515/jeb-2017-0002. Go to original source...
    47. Rakhman, F., & Wijayana, S. (2019). Determinants of Financial Reporting Quality in the Public Sector: Evidence from Indonesia. The International Journal of Accounting, 54(3), 1-35. https://doi.org/10.1142/S1094406019500094. Go to original source...
    48. Reguerra-Alvarado, N., de Fuentes, P., & Laffarga, J. (2017). Does Board Gender Diversity Influence Financial Performance? Evidence from Spain. Journal of Business Ethics, 141(2), 337-350. https://doi.org/10.1007/s10551-015-2735-9. Go to original source...
    49. Sharif, K. (2019). Transformational leadership behaviours of women in a socially dynamic environment. International Journal of Organizational Analysis, 27(4), 1191-1217. http://dx.doi.org/10.1108/IJOA-12-2018-1611. Go to original source...
    50. Silva, A. (2016). What is Leadership? Journal of Business Studies Quarterly, 8(1), 1-5.
    51. Snaebjornsson, I. M., Edvardsson, I. R., Zydziunaite, V., & Vaiman, V. (2015). Cross-Cultural Leadership: Expectations on Gendered Leaders' Behavior. Sage Open, 5(2). https://doi.org/10.1177/2158244015579727. Go to original source...
    52. Statista. (2019, December). Educational attainment worldwide in 2020, by gender and level. Retrieved, May 31, 2024, from https://www.statista.com/statistics/1212278/education-gender-gap-worldwide-by-level/
    53. Stempel, C. R., Rigotti, T., & Mohr, G. (2015). Think transformational leadership-Think female? Leadership, 11(3), 259-280. https://doi.org/10.1177/1742715015590468. Go to original source...
    54. Tabassum, N., & Nayak, B. S. (2021). Gender stereotypes and their impact on woman's career progression from a managerial perspective. IIM Kozhikode Society & Management Review, 10(2), 192-208. https://doi.org/10.1177/2277975220975513. Go to original source...
    55. Taylor, C. J. (2010). Occupational Sex Composition and the Gendered Availability of Workplace Support. Gender & Society, 24(2), 189-212. https://doi.org/10.1177/2158244015579727. Go to original source...
    56. Tipurić, D., Podrug, N., Hruška, D., Mešin, M., Lovrinčević, M., Slišković, T., & Daraboš, M. (2011). Promjene vrhovnog menadžmenta i korporativno upravljanje, Sinergija nakladništvo d.o.o. Zagreb.
    57. Triana, M., Miller, T., & Trzebiatowski, T. (2014). The Double-Edged Nature of Board Gender Diversity: Diversity, Firm Performance, and the Power of Women Directors as Predictors of Strategic Change. Organisational Science, 25(2), 609-632. https://doi.org/10.1287/orsc.2013.0842. Go to original source...
    58. Turkmen, B., & Eskin Bacaksiz, F. (2021). Does the glass elevator still work: A descriptive and cross-sectional study in the context of gender in Turkey. Journal of Nursing Management, 29(5), 1275-1283. https://doi.org/10.1111/jonm.13266. Go to original source...
    59. Vranješ Radovanović I., Šurina Hanzl G., &, Selanec, G. (2016). Istraživanje o zastupljenosti žena i muškaraca na upravljačkim pozicijama u poslovnim subjektima u Republici Hrvatskoj / Top 500 (Study on the participation of women and men in company boards and managerial positions in business entities / Top 500 companies), available at: http://staklenilabirint.prs.hr/wp-content/uploads/2014/08/PRSRH_Izvjesce_muskarci-zene500_web.pdf.
    60. Whittaker, R. (2014). Does corporate gender equality lead to outperformance? ROBECOSAM, available at: http://www.robecosam.com/images/Does_corporate_gender_equality_lead_to_outperforman ce.pdf.
    61. World Bank Group (n.d.). Labor force, female (% of total labor force). Retieved May 31, 2024, from https://data.worldbank.org/indicator/SL.TLF.TOTL.FE.ZS

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content