Gender and corporate governance: A moderating analysis on tax avoidance strategies

Abstract

This study aims to analyze the impact of corporate governance, specifically the Board of Directors (BOD), Board of Commissioners (BOC), and the proportion of independent (PIC) commissioners, on corporate tax avoidance strategies among public companies in Indonesia. Additionally, it explores the moderating role of gender diversity in strengthening or weakening the relationship between corporate governance and tax avoidance. The study focuses on non-financial companies listed on the Indonesia Stock Exchange (IDX) during the 2018-2022 period, employing a quantitative approach with unbalanced panel data and fixed effects regression analysis. The sample consists of 380 companies, yielding 1,660 observations. The research indicates that elements of corporate governance (especially the size of the BOD and PIC) do not have a pronounced effect on tax avoidance. On the other hand, having a large BOC seems to correlate negatively with tax avoidance, suggesting that a high level of oversight can limit overly aggressive tax planning. The proportion of women in leadership positions (GD1) and women serving as CEOs (GD2) does not portray a direct or moderating influence on the relationship between governance and tax avoidance. These findings point to the fact that gender diversity's impact on corporate governance in Indonesia may be limited by institutional and cultural challenges. This is consequently why the study suggests that corporate governance and gender diversity have limited influence on tax avoidance in Indonesia. The findings emphasize the need for more inclusive corporate governance reforms and efforts to empower women in strategic decision-making roles.