Board Gender Diversity and Tax Aggressiveness: Moderating Role of Board Independence

This study empirically investigates the connection between board gender diversity and tax aggressiveness, as well as the moderating role of board independence in this association. This is against the backdrop of the lack of extant literature on this issue in Nigeria. Using data extracted from the audited annual reports of 12 Deposit Money Banks listed on the Nigerian Exchange Group (NGX) for the period 2013 to 2022 and based on the Upper Echelon and Gender Socialisation theories, the study reveals that banks with more female board representation are more likely to engage in aggressive tax practices. In contrast, board independence displays a strong and negative relationship with tax aggressiveness, indicating that firms with higher level of independent directors are significantly less likely to engage in tax aggressiveness. Most significantly, the interaction analysis reveals evidence that board independence significantly moderates the relationship between board gender diversity and tax aggressiveness. The negative and significant coefficient for the interaction term suggests that the positive connection between gender diversity and tax aggressiveness is neutralised when board independence is high. This highlights the fact that female board representation should be combined with appropriate governance mechanism to achieve its desired benefits. The findings of this study contribute to the literature on corporate governance and tax behavior, providing valuable insights for policymakers and regulators on how board composition and independence can curb unethical financial practices, including emphasizing the need for Deposit Money Banks in Nigeria to improve female board representation beyond tokenism.