Does female governance constrain earnings management? A thematic literature review and future research agenda

Purpose This study aims to provide a thematic literature review (TLR) of the relationship between female governance and earnings management (EM), providing theoretical and contextual insights into how women's participation in board, executive, and oversight governance roles is associated with managerial opportunism. Design/methodology/approach This review is based on a structured search of Scopus and Web of Science and a thematic synthesis of 98 empirical studies published between 2010 and 2024. It examines three forms of EM: accrual-based EM (AEM), real EM (REM), and earnings classification shifting (ECS). The synthesis is structured around four themes: female governance and EM across market contexts, role-specific governance effects, governance interactions, and contextual moderators. Findings The evidence indicates a predominantly negative association between female governance and EM, particularly for accrual-based manipulation. Women occupying strategically influential positions, such as CFO roles or monitoring-intensive audit committee positions, are more consistently associated with enhanced financial reporting quality. However, these effects are conditional rather than universal and depend on factors, including financial expertise, director independence, ownership structure, institutional environment, and the achievement of a critical mass of female directors. While the relationship with AEM is relatively robust, the findings for REM and ECS are mixed, suggesting potential substitution effects and contextual moderation. Overall, female governance emerges as an important, yet context-sensitive, mechanism for strengthening reporting integrity. Research limitations/implications The findings underscore the need for theory-integrated, multi-method research that accounts for institutional settings, board composition, and role-specific influence. Notably, gaps remain in the study of non-accrual EM mechanisms, such as ECS, and in the operationalization of diversity metrics and female presence on boards. Practical implications The findings highlight the need for theory-integrated and multi-method research that accounts for institutional settings, governance configurations, and role-specific influence. Important gaps remain in the examination of non-accrual EM mechanisms, particularly ECS, and in the operationalisation of female governance metrics and board-level female influence. Social implications Implications for Society and Stakeholders that gender-diverse boards serve as a tangible indicator of ethical leadership and accountability, which are critical for public trust and investor confidence. Evidence from the review suggests positive impacts on ESG performance, cost of capital, and earnings transparency, making board diversity a material consideration for investors, analysts, and rating agencies. Furthermore, diversity at the leadership level reinforces long-term stakeholder engagement and sustainable corporate behavior. Originality/value By integrating EM types with governance mechanisms and institutional factors, this review advances the understanding of when and how female governance constrains EM and enhances financial reporting integrity, and outlines a targeted agenda for future research.