Female directors' representation and intellectual capital efficiency: does institutional ownership matter?

PurposeThis study examines the impact of female directors' representation in the boardroom and the role of institutional ownership (IO) on intellectual capital efficiency (ICE) and its three efficiency components: human capital efficiency (HCE); innovation capital efficiency (INCE) and capital employed efficiency (CEE).Design/methodology/approachA sample of non-financial French firms listed within the Societe des Bourses Francaises-120 (SBF-120) was employed for the period from 2011 to 2020 using the generalized method of moments (GMM) approach to test the set of hypotheses.FindingsGrounded in agency and resource dependence theories, this study found that female directors play a vital role in enhancing ICE. IO also has a significant role to play. Active institutional investors tend to push toward gender-balanced boardrooms and play an external supervisory role to improve efficiency. Moreover, female financial experts on audit committees also contribute to the ICE decision-making process within firms with high IO levels.Research limitations/implicationsThis study focused only on IO. Future research may use other forms of ownership, such as foreign or family ownership.Practical implicationsThe findings may serve as a reference for managers and policymakers to enhance IC management and make appropriate investment decisions. Managers and policymakers may rely on strategic and effective decisions regarding the efficient use of IC for value creation through the judgments of female directors.Originality/valueThe current study adds significant insights to the accounting and intellectual capital literature.