Do Female Directors Protect Employee Pension Benefits? Evidence on the Nexus Between Pensions and Dividends

This study examines whether female directors influence firms’ allocation of internal funds between dividend payments and defined benefit (DB) pension funding. Using FTSE All-Share firms from 2007–2021, we find that companies with a higher proportion of female directors exhibit stronger pension funding positions and, overall, maintain balanced dividend policies. When pension plans are underfunded or financial constraints tighten, gender-diverse boards prioritize closing pension deficits over paying dividends. These findings indicate that female directors foster employee-oriented, ethical, and socially responsible financial decisions, extending the understanding of gender diversity’s role in corporate financial policy.