Integrated reporting as a tool to mitigate agency costs: does board gender diversity matter?

Purpose The purpose of this study is to investigate the impact of integrated reporting (IR) on agency costs and to examine the role of board gender diversity in the context of an emerging economy. Design/methodology/approach Using a sample of Bangladeshi manufacturing firms and underpinning the agency theory, the study hypothesizes that IR decreases agency costs by reducing information asymmetry and board gender diversity strengthens this relationship. Both static and dynamic panel data analysis have been used to test the hypothesis. Findings The findings show a growing trend of IR adoption by sample firms from 2018 to 2023. The multivariate analysis shows that IR has a negative and significant impact on agency costs. The role of IR in reducing such costs is more prominent in the presence of greater gender diversity in the boards. The results further show that the influence of IR in mitigating agency costs is more pronounced in high IR practicing firms compared to the low ones. Practical implications The findings suggest that firms can reduce agency costs by adopting IR practices, especially when supported by greater board gender diversity. This highlights the importance for policymakers and corporations to promote gender-inclusive boards for enhanced corporate transparency and accountability. Originality/value To the best of the authors’ knowledge, this study is the first to examine the moderating role of board gender diversity on the relationship between IR and agency costs in the context of Bangladesh. It offers unique insights into how diverse boards enhance the effectiveness of IR in mitigating agency costs and contribute to the IR literature in the context emerging economy.