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Anggaran: Jurnal Publikasi Ekonomi dan Akuntansi
Volume. 2, No. 4, Desember 2024
e-ISSN : 3031-3384; dan p-ISSN : 3031-3392; Hal. 123-139
DOI: https://doi.org/10.61132/anggaran.v2i4.938
Available online at: https://journal.areai.or.id/index.php/anggaran
Received: September 16,2024; Revised: September 30,2024; Accepted: Oktober 26,2024; Online Available: Oktober 28,2024;
The Role Of Emotional Intelligence in The Board Of Directors and Its
Impact On The Performance and Value Of Institutions and Conservative
Practices In Light Of Crises (Applied Research On a Sample Of Banks
Listed On ISX)
Yassir Nori Mohammed1*, Mustafa Abdalsamea Abdalhamed2, Najlaa Tareq Kadhim3
1-3University Of Baghdad, Iraq
yassir_nori@uobaghdad.edu.iq1*, mustafa.sa@clib.uobaghdad.edu.iq2
, najlaa.kazem@clib.uobaghdad.edu.iq3
Korespondensi Penulis: yassir_nori@uobaghdad.edu.iq*
Abstract.This research aims to underscore the significance of women's emotional intelligence in enhancing the
effectiveness of the Board of Directors, a crucial component of internal governance, particularly during crises.
Despite strides made in recent decades in appointing women to senior roles in government, business, and
education, challenges persist in improving women's leadership opportunities, especially in developing countries.
The study utilizes statistical methods, including Pearson's correlation, to analyze the relationships between
variables within a sample of banks listed on the Iraqi securities market, comparing periods before and during the
COVID-19 pandemic (2019 and 2020). The goal is to measure the impact of female emotional intelligence on the
Board of Directors' ability to manage crises, focusing on variables such as conservative accounting policies,
Board compensation and benefits, meeting frequency, the ratio of external auditor fees to enterprise capital,
enterprise capital, share profitability, and the market-to-share profitability ratio. Findings indicate that emotional
intelligence (measured by the number of females on the Board) positively influences conservative accounting
policies and meeting frequency during crisis periods. Conversely, the pre-crisis period showed a negative
relationship, suggesting a proactive and risk-responsive stance by women during crisis. Additionally, the study
observed an inverse relationship between crisis periods and both Board compensation and external auditor fee
ratios, implying a cost-reduction strategy facilitated by female emotional intelligence. The crisis period also saw
an increase in the profitability of individual shares and the market-to-share profitability ratio. The research
recommends expanding the study to compare the role of emotional intelligence in Boards between developing and
developed economies.
Keywords: Emotional Intelligence, Effective Leadership, Board of Directors, Crises, Enterprise performance,
Enterprise value, Conservative accounting policy
Abstrak.Penelitian ini bertujuan untuk menekankan pentingnya kecerdasan emosional perempuan dalam
meningkatkan efektivitas Dewan Direksi, yang merupakan komponen penting dalam tata kelola internal, terutama
selama krisis. Meskipun ada kemajuan yang signifikan dalam beberapa dekade terakhir dalam menunjuk
perempuan ke posisi senior di pemerintahan, bisnis, dan pendidikan, tantangan masih ada dalam meningkatkan
kesempatan kepemimpinan perempuan, khususnya di negara-negara berkembang. Studi ini menggunakan metode
statistik, termasuk korelasi Pearson, untuk menganalisis hubungan antara variabel dalam sampel bank yang
terdaftar di pasar sekuritas Irak, membandingkan periode sebelum dan selama pandemi COVID-19 (2019 dan
2020). Tujuannya adalah untuk mengukur dampak kecerdasan emosional perempuan terhadap kemampuan
Dewan Direksi dalam mengelola krisis, dengan fokus pada variabel seperti kebijakan akuntansi konservatif,
kompensasi dan tunjangan Dewan, frekuensi pertemuan, rasio biaya auditor eksternal terhadap modal perusahaan,
modal perusahaan, profitabilitas saham, dan rasio profitabilitas pasar terhadap saham. Temuan menunjukkan
bahwa kecerdasan emosional (diukur dengan jumlah perempuan di Dewan) berpengaruh positif terhadap
kebijakan akuntansi konservatif dan frekuensi pertemuan selama periode krisis. Sebaliknya, periode pra-krisis
menunjukkan hubungan negatif, mengindikasikan sikap proaktif dan responsif terhadap risiko oleh perempuan
selama krisis. Selain itu, studi ini mengamati hubungan invers antara periode krisis dengan rasio kompensasi
Dewan dan biaya auditor eksternal, yang mengindikasikan strategi pengurangan biaya yang difasilitasi oleh
kecerdasan emosional perempuan. Periode krisis juga menunjukkan peningkatan dalam profitabilitas saham
individual dan rasio profitabilitas pasar terhadap saham. Penelitian ini merekomendasikan untuk memperluas studi
guna membandingkan peran kecerdasan emosional di Dewan antara ekonomi berkembang dan maju.
Kata kunci: Kecerdasan Emosional, Kepemimpinan Efektif, Dewan Direksi, Krisis, Kinerja Perusahaan, Nilai
Perusahaan, Kebijakan Akuntansi Konservatif
The Role Of Emotional Intelligence in The Board Of Directors and Its Impact On The Performance and Value Of
Institutions and Conservative Practices In Light Of Crises (Applied Research On a
Sample Of Banks Listed On ISX)
124 ANGGARAN - VOLUME. 2, NO. 4, DESEMBER 2024
1. INTRODUCTION
In a seminal publication three decades’ prior, Peter Salovey and John Mayer introduced
the concept of emotional intelligence to the academic discourse. They characterized it as a form
of cognitive ability closely aligned with traditional notions of intelligence, emphasizing its
capacity for the discernment and management of both personal and interpersonal emotions.
This included the ability to monitor one's own emotional states as well as those of others, and
to utilize this information strategically in guiding cognitive processes and behavioral
responses(Salovey and Mayer, 1990). According to (Goleman, 1998), Emotional intelligence
delineates the capacity to discern, comprehend, and regulate both personal and interpersonal
emotional states. This construct encompasses a spectrum of constituents, notably self-
awareness, self-regulation, motivation, empathy, and social adeptness. Self-awareness pertains
to the aptitude to perceive and interpret one's own emotional experiences, values,
competencies, and limitations. Self-regulation encompasses the adept management of internal
emotional states, cognitive processes, and behavioral patterns congruent with one's intrinsic
values and objectives. Motivation manifests as an intrinsic impetus propelled by personal
aspirations or growth objectives rather than external stimuli. Empathy epitomizes the ability to
cognitively apprehend and emotionally resonate with the sentiments of others. Social skills
encompass the proficiency in interpersonal communication, conflict resolution, and
relationship cultivation. Elevated emotional intelligence in female leaders is associated with
improved leadership effectiveness. Furthermore, emotional intelligence has a beneficial effect
on organizational culture, which in turn enhances high-performance leadership. Organizational
culture acts as a mediator in the relationship between emotional intelligence and the effective
leadership of women, underscoring the importance of a supportive organizational culture in
bolstering this connection. Therefore, organizational efforts to nurture a conducive culture are
recommended to promote success for both female leaders and organizations(Duan et al., 2023).
The correlation between emotional intelligence and decision-making processes is pivotal in
driving stock market profitability. As investors grapple with the intricate dynamics of economic
fluctuations, the capacity to manage emotions emerges as a critical factor. Individuals with
elevated levels of emotional intelligence demonstrate more consistent decision-making
behaviors, particularly in response to market variations. By effectively regulating emotions
such as loss aversion, investors can adopt a more logical and impartial approach to investment
selection, consequently fostering heightened profitability. Given the significant impact of
emotional factors on investor behavior, the cultivation of emotional intelligence skills presents
an avenue for bolstering resilience and adaptability in volatile market environments, thereby
E-ISSN : 3031-3384; DAN P-ISSN : 3031-3392; HAL 123-139
contributing to the broader efficacy and stability of the stock market (awalakki, 2022). This
research aims to investigate the significance of emotional intelligence, particularly among
women, in guiding decision-making within corporate boards, which serve as pivotal internal
governance mechanisms, particularly during crisis situations. The study focuses on the Iraqi
stock market before and during the COVID-19 pandemic, exploring how EI influences various
aspects of board dynamics. Specifically, it examines the conservative accounting practices,
board compensation and bonuses, meeting frequency, external auditor remuneration relative to
institutional capital, institutional capital itself, earnings per share, and market share price
relative to earnings per share.
2. LITERATURE REVIEW
Emotional intelligence and its components
The notion of Emotional Intelligence was first proposed by (Salovey and Mayer, 1990).
This initial conceptualization emphasized an individual's capacity to identify, comprehend, and
manage emotions within oneself and in others. This pioneering perspective extended the
traditional understanding of intelligence beyond mere academic or cognitive abilities,
incorporating emotional and social skills into the framework as well. (Habib et al., 2023)
elucidates that Emotional Intelligence (EI) comprises capabilities essential for the effectively
recognize emotions and understand the multifaceted nature of emotional intelligence, focusing
on emotional perception as an important pillar in distinguishing the origins of emotions and
their effects. In particular, it discusses emotional management, which increases the ability to
adapt and make wise decisions, and examines how to benefit from emotions and employ them
in solving problems and establishing creative relationships.
Emotional intelligence and the board of directors
emotional intelligence makes board decisions better. It helps board members discuss
problems thoughtfully, leading to the best solutions that are achieved quickly and efficiently
(Alzoubi and Aziz, 2021). Moreover, It also works to improve the quality of decisions, as
emotional intelligence helps to manage emotions and empathize with others, which reduces the
influence of emotions on decisions and improves the quality of decisions (Rahim et al., 2021).
Emotional intelligence also works to improve communication and interaction and helps build
positive relationships between the board, which reduces tensions and disagreements, and
improves communication and interaction within the board (Goleman, 2021). Additionally,
The Role Of Emotional Intelligence in The Board Of Directors and Its Impact On The Performance and Value Of
Institutions and Conservative Practices In Light Of Crises (Applied Research On a
Sample Of Banks Listed On ISX)
126 ANGGARAN - VOLUME. 2, NO. 4, DESEMBER 2024
Emotional intelligence improves leadership in understanding the needs of the organization and
its employees, and developing a clear vision and strategy that takes these needs into account,
which reduces tensions and disagreements. (Cherniss and Roche, 2020). It also helps to manage
change and adapt to the changing environment of the board, which reduces tensions and
disagreements, and improves the management's changes (Drigas and Papoutsi, 2020).
Collectively, emotional intelligence profoundly impacts board resolutions by refining decision-
making, decision quality, communication, leadership, and change management. Research by
(Nouri, 2022), indicates a definitive role of emotional intelligence in diminishing workplace
stress, asserting its pivotal role in alleviating such pressures. Additionally, rational decision-
making is notably facilitated by emotional intelligence, while a study by (Hashem, 2020)
suggests that leveraging the facets of strategic emotional intelligence collectively propels
organizational success through motivational impacts that boost efficiency and effectiveness,
thereby optimizing performance. (Aljanabi, 2022), observes a pronounced emphasis on
enhancing aspects of emotional intelligence, particularly in managing, understanding, and
leveraging emotions, with a moderate focus on recognizing them. The incorporation of virtues
such as optimism, trust, integrity, compassion, and tolerance are significantly instrumental in
fostering organizational virtue.
Emotional intelligence and financial performance
The (KORPES, 2023) demonstrated the influence of emotional intelligence on the
efficacy of financial managers. Utilizing linear regression analysis on a diverse array of firms,
the research uncovered a substantial positive correlation between the emotional intelligence of
financial managers and the enhancement of financial business performance. Additionally, the
findings revealed that Chief Financial Officers possessing elevated levels of emotional
intelligence are capable of fostering trust within the workplace, thereby bolstering productivity,
sales, and profit margins. Consequently, this study finds that superior emotional intelligence in
financial management is associated with greater company value and strong financial
performance. The study by (Mahdi and Al-Rabaiwi, 2020) further suggested that emotional
intelligence skills are a pivotal interactive variable that strengthens the link between internal
marketing and customer satisfaction. Therefore, emotional intelligence is considered an
essential factor in developing management practices and improving internal marketing
activities by adopting strategies tailored to the company's operations, which ultimately aim to
raise the level of customer satisfaction.
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Emotional intelligence significantly improves financial decision-making by enhancing
communication, adaptability under pressure, and leadership acumen. It plays a pivotal role in
decision-making, problem resolution, and the cultivation of social competencies, which are
crucial for financial prosperity. Emotional intelligence fosters a positive workplace
atmosphere, leading to improved collaboration and effective leadership, which in turn
culminates in superior financial outcomes (Bouzguenda, 2018). Additionally, the study by
(Hassoun and Sakhr, 2021) indicated a statistically significant relationship between emotional
intelligence and the personal and professional traits of accountants, impacting their auditing
efficiency. The research also recommended the augmentation of emotional intelligence among
auditors to elevate their performance levels and mitigate their responsibilities.
While emotional intelligence is integral to the decision-making process and can
influence stock prices (Momtaz, 2021, Ruqayyah et al., 2022), it encompasses the
comprehension and management of emotions, impacting individual interactions and decision-
making. Research correlates emotional intelligence with social intelligence and adaptive
behaviors. Although not directly tied to stock prices, emotional intelligence influences
individuals' cognitive processes and relationships, which may indirectly affect their financial
decisions and, consequently, stock prices (Badawi, 2023, Bucciol et al., 2021). Emotional
intelligence is also associated with customer retention and the enhancement of service quality.
Therefore, emotional intelligence is a crucial element in elevating the quality of financial,
accounting, and controlling work performance (Hassoun and Sakhr, 2021).
Impact of emotional intelligence on governance
Emotional intelligence significantly influences organizational governance by enabling
leaders to regulate their emotions effectively and make challenging decisions through
deliberate problem identification and optimal solution discovery, ensuring minimal cost and
maximum efficiency (Moon, 2021). In today's dynamic and complex work environment,
leadership imbued with emotional intelligence is crucial for maintaining organizational
continuity and achieving strategic objectives (Goleman, 2021, Reshetnikov et al., 2020).
Leaders endowed with emotional intelligence are adept at making judicious governance
decisions that consider the interests of all stakeholders (Blaik Hourani et al., 2023), by
mastering self-awareness and enhancing their interpersonal relations, which are pivotal for
effective leadership.
Research indicates that insufficient emotional intelligence can lead to diminished
decision-making capabilities and lower performance levels among managers. Crucial
The Role Of Emotional Intelligence in The Board Of Directors and Its Impact On The Performance and Value Of
Institutions and Conservative Practices In Light Of Crises (Applied Research On a
Sample Of Banks Listed On ISX)
128 ANGGARAN - VOLUME. 2, NO. 4, DESEMBER 2024
emotional intelligence competencies for board members include self-management and
empathy. Navigating and resonating with others' emotions necessitates the development of
these competencies (Bostrack, 2023, Ruqayyah et al., 2022). Consequently, board members'
proficiency in emotional intelligence fosters a deeper understanding of others' emotions and
enhances their social interactions, positively impacting the frequency and success of board
meetings (Trong Tuan, 2013, Hall et al., 2024). Emotional intelligence also plays a pivotal role
in reward policies for board members, where rewards are allocated for exemplary
contributions(Elleuch et al., 2015).
Furthermore, emotional intelligence is paramount in augmenting the efficiency and
effectiveness of auditing processes. Auditors firmly believe that emotional intelligence
enriches both personal and professional attributes (Pinatik, 2021, Zhao et al., 2022). Emotional
intelligence is of great importance in the accounting profession, as it helps accountants better
exercise professional judgment and enhance integrity and transparency in preparing financial
reports. Emotional intelligence and accounting conservatism are two complementary concepts
in accounting. Emotional intelligence helps to make sound ethical decisions, while accounting
conservatism ensures accuracy and transparency in preparing financial reports. Combining
them enhances the professional integrity of accountants (Khalil, 2019).
The study by (Supramaniam and Singaravelloo, 2019) investigated between emotional
intelligence (EI) of management and organizational culture (OC) in influencing the efficacy
and efficiency of institutional performance focused on the interaction between EI and
governance practices, demonstrating a significant positive correlation between emotional
intelligence and organizational performance, these findings suggest that prioritizing the
development of emotional intelligence within management ranks can lead to improved policy
implementation and ultimately contribute to achieving strategic governance objectives.
Furthermore, research conducted by (Al-Zubaidi, 2013) investigated the integration of
emotional intelligence strategies within university settings, focusing on their impact on
institutional performance.
Gender difference in leadership
Impact of EI on Women as Leader — A Study by (Shabani et al., 2021) It recognizes
EI as the most important component of leadership, especially for females who are assumed to
be more caring. The study recommends improving women skills development and increasing
training opportunities on EI for better leadership effectiveness both at a personal level as well
as organizational level in order to have more female leaders. Kiris, S. (2021) Explore
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differences in emotional intelligence (EI) between men and women. Papoutsi, Michail /Salas
Muratore, Elizabeth /Bouchard, Michael (2022) study investigate the gender differences of EI
scores from women were found to score higher overall than men. In signaling EI as an
important spoke in the wheel of the leadership strategies with potential to put more women into
more positions of power and equality, this finding presents an opportunity. This research
suggests implementing measures to improve EI in both sexes and highlights the benefits of
technology, especially ICT in empowering women all over the world and promoting gender
equality. The study (Azouzi and Jarboui), discussed the important role of emotional
intelligence (EI) in decision making within leadership, focusing on women's leadership. This
paper explores the impacts of EI and how it affects decision biases along with governance
mechanisms. The results indicate that the high level of emotional intelligence high in women
leaders helps them make decisions, which often leads to effective governance and strategy. As
a result, harnessing emotional intelligence (EI) competencies in women leaders can help
strengthen their influence and effectiveness as decision-makers.
3. RESEARCH METHODOLOGY
Research Problem
On 1: Irfan Khan et al Emotions and the Dynamics of Governance; The Role of
Emotional Intelligence (EI) in mediating between Financial Crisis and Gender Composition
with Organizational Decision-Making used with permission, The key question addressed
studied is to what extent social decisions derived from organizational decision-making process
and data governance procedures are influenced by emotional intelligence (EI), especially
during periods of financial crises that require the involvement a more substantial percentage of
women on boards. Here, evidence is taken from organisational crisis literature to inform
questions of governance and performance in times of crisis, arguing that emotional intelligence
can play a vital role, particularly as women are increasingly occupying more leadership
positions across sectors. This discrepancy manifests itself in the conservative accounting
methods, board remuneration, frequency of meetings and other financial metrics of businesses
dealing with economic uncertainty. It extends beyond identifying how these traits relate to
financial performance in stable conditions as compared with catastrophe (think COVID-19).
The Role Of Emotional Intelligence in The Board Of Directors and Its Impact On The Performance and Value Of
Institutions and Conservative Practices In Light Of Crises (Applied Research On a
Sample Of Banks Listed On ISX)
130 ANGGARAN - VOLUME. 2, NO. 4, DESEMBER 2024
Research Objectives
1. To Explore the Impact of Emotional Intelligence: Examine how the emotional
intelligence of women on the board influences the board's effectiveness in governance
and decision-making during crises.
2. To Analyze Governance Practices: Investigate the relationship between the presence of
emotionally intelligent women on the board and various governance practices, including
conservative accounting, board compensation, and the frequency of board meetings.
3. To Assess Financial Performance: Determine the impact of emotional intelligence on key
financial metrics such as external auditor fees, enterprise capital, share profitability, and
market-to-share profitability ratios during and before the crisis.
4. Comparative Analysis: Compare the influence of emotional intelligence on board
dynamics and financial outcomes in periods of stability versus periods of crisis.
Research Aims
The primary objective of this research is to explain how emotional intelligence,
especially with relation to female board members, leads to better organizational performance
and crisis resilience as well as higher board governance efficacy. This study seeks to provide
empirical evidence on how emotional intelligence affects conservative behaviors, board
management, and financial performance in the face of major economic upheavals by focusing
on the banking sector in Iraq during the prior to the crisis and crisis times in 2019 and 2020.
Also, by providing insights into the possibility for emotional intelligence to function as a
crucial asset in handling crises and stability in organizations, this research aims to advance the
conversation on gender and leadership.
Research hypothesis
The hypotheses were developed based on the theoretical presentation of the link between
the study's variables, and the study's hypothesis is comprised of several hypotheses:
First hypothesis: there is a correlation between the financial crisis framework's
conservative accounting practices and emotional intelligence, as measured by the
proportion of women on the board of directors.
Hypothesis 2: The frequency of female representation on the board of directors and their
emotional intelligence are related to the board meetings during financial crises.
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Hypothesis 3: In the scope of financial crises, there is a correlation between bonuses and
compensation for the board of directors and emotional intelligence, as measured by the
proportion of women on the board.
Hypothesis 4: In the scope of financial crises, there is a relationship between emotional
intelligence (the proportion of women on the board of directors) and the salary of the
accountable external auditor.
Hypothesis 5: According to the financial crisis’s framework, there is a correlation
between an institution's book value and emotional intelligence, which is measured by the
proportion of women on the board of directors.
Hypothesis 6: the relationship between a single arrow's profitability in the face of
financial crises and emotional intelligence, as measured by the proportion of women on
the board of directors.
Hypothesis 7: the relation between emotional intelligence (the number of females in the
board of directors) and the ratio of market share price to stock profitability in the face of
financial crises.
Research community and sample
The study population is represented by banking institutions listed on the Iraq Stock
Exchange for the year 2019, which is before the outbreak of the crisis and for the year 2020
when the crisis occurred. The number is 7 institutions. The importance of the selected period
was in measuring the impact of the variables before the period of the crisis and the period of
the crisis, while we chose the banking sector because it provides complete reports about
governance.
Procedural
In this research, statistical methods, including the Pearson correlation coefficient, will
be employed using the SPSS software to analyze the relationships between variables. To
measure aspects such as the board of directors' structure, gender diversity, compensation,
rewards, and meeting frequency, we will utilize data from published financial reports. The level
of accounting conservatism will be assessed based on the model proposed by (Beaver and Ryan,
2000), which uses the ratio of market value to book value. For variables such as earnings per
share, the ratio of market price to earnings per share, audit fees relative to the institution's
capital, and the institution's capital itself, data will be extracted from the published financial
The Role Of Emotional Intelligence in The Board Of Directors and Its Impact On The Performance and Value Of
Institutions and Conservative Practices In Light Of Crises (Applied Research On a
Sample Of Banks Listed On ISX)
132 ANGGARAN - VOLUME. 2, NO. 4, DESEMBER 2024
reports available on the Iraqi Stock Exchange Authority website (https://Earningspershare
www.jsc.gov.jo/) and the Companies Guide (http://www.isx-
iq.net/isxportal/portal/companyGuideList.html).
Finding
First, the 2019 Pearson correlation between emotional intelligence on the board of
directors (number of females) and study variables.
We note from the table (1) that the correlation coefficient between emotional
intelligence (number of females) on the board of directors reached (0.029) with earnings per
share, which is a direct relationship. While it was (-0.181) with the ratio of the market share
price to earnings per share, which is an inverse relationship, while it was (0.167) with the
compensation and rewards of the Board of Directors, which is a direct relationship, and it was
(-0.214) with the number of meetings, which is an inverse relationship, while it was (0.499)
With the ratio of audit fees to the institution’s capital, which is a direct relationship, and it was
(-0.167) with the institution’s capital, which is an inverse relationship, and it was (-0.029) with
accounting conservatism, which is an inverse relationship. Table (1) shows the relationship
between emotional intelligence (number of females In the Board of Directors) and variables
before the crisis period, chart (1) showing the relationship between accounting conservatism
and variables.
Year
Earning Per
Share
The Ratio
Of Market
Earnings
Per Share
To
Earnings
Per Share
Compensation
Or Bonuses Of
The Board Of
Directors
Number
Of
Meetings
The Ratio Of
Audit Fees
To The
Institution’s
Capital
The
Enterprise's
Capital
Accounting
Reservation
2019
0.029
-0.181
0.167
-0.214
0.499
-0.167
-0.029
Table (1): the relationship between emotional intelligence and variables (Reference
assembled by the author)
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Chart (1): the relationship between emotional intelligence and variables (Reference
assembled by the author)
Second: Pearson correlation coefficient for the year 2000 during the financial crisis between
emotional intelligence in the board of directors (number of females) and the study variables.
We note from the table (2) below that the correlation coefficient between emotional intelligence
(number of females) on the board of directors was (0.044) with earnings per share, which is a direct
relationship, while it was (-0.012) with the ratio of market share price to earnings per share, which is
an inverse relationship. While it was (-0.325) with the compensation and rewards of the Board of
Directors, which is an inverse relationship, and it was (0.063) with the number of meetings, which is a
direct relationship, while it was (-0.201) with the ratio of audit fees to the institution’s capital, which is
an inverse relationship, and it was (0.808) with the institution’s capital. It is a direct relationship, and it
was (0.659) with accounting conservatism, which is a direct relationship. Table (2) shows the
relationship between emotional intelligence (number of females on the board of directors) and variables
in light of the crisis, chart (2) showing the relationship between accounting conservatism and variables.
Year
Earning
Per Share
The Ratio
Of Market
Earnings
Per Share
To
Earnings
Per Share
Compensation
Or Bonuses
Of The Board
Of Directors
Number
Of
Meetings
The Ratio
Of Audit
Fees To
The
Institution’
s Capital
The
Enterprise's
Capital
Accounting
Reservation
2020
0.044
-0.012
-0.325
0.063
-0.201
0.808
0.659
Table (2): The relationship between emotional intelligence (number of females) and
variables (Reference assembled by the author)
The Role Of Emotional Intelligence in The Board Of Directors and Its Impact On The Performance and Value Of
Institutions and Conservative Practices In Light Of Crises (Applied Research On a
Sample Of Banks Listed On ISX)
134 ANGGARAN - VOLUME. 2, NO. 4, DESEMBER 2024
Chart (2): The relationship between emotional intelligence (the number of females on
the board of directors) and variables (Reference assembled by the author)
4. RESULTS DISCUSSION
Analysis of Tables (1) and (2) reveals variations in the correlation coefficient
concerning the emotional intelligence, quantified by the number of females on the board of
directors, and several financial indicators during the crisis period. The correlation with earnings
per share rose by 0.015 and exhibited a more pronounced increase of 0.170 in relation to the
market share price to earnings per share ratio. Conversely, the association with compensation
and bonuses for the Board of Directors decreased by 0.491, while it surged by 0.276 concerning
the frequency of meetings. A significant decline of 0.700 was observed in the correlation with
the ratio of audit fees to the institution's capital. However, a robust increase of 0.975 was
observed with the institution's capital, and a significant rise of 0.689 was noted with accounting
conservatism. Table (3), presented below, elucidates the differential impacts on these
relationships amid the crisis with regards to the emotional intelligence reflected by female
representation on the board, chart (3) showing the difference in the impact of the relationship
between emotional intelligence (number of females on the board of directors) and variables.
Year
Earning
Per Share
The Ratio
Of Market
Earnings
Per Share
To
Earnings
Per Share
Compensation
Or Bonuses
Of The Board
Of Directors
Number
Of
Meetings
The Ratio
Of Audit
Fees To
The
Institution’
s Capital
The
Enterprise's
Capital
Accounting
Reservation
The
Difference
0.015
0.170
-0.491
0.276
-0.700
0.975
0.689
Table (3): The difference in influence of the relationship between emotional intelligence
(number of females) and variables in light of the crisis (Reference assembled by the
author)
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Chart (3): The difference in the relationship between emotional intelligence (the number
of females on the board of directors) and variables in light of the crisis (Reference
assembled by the author)
Chart (4), illustrates the relationship between emotional intelligence, measured by the
number of females on the board of directors, and various financial variables, highlighting the
differential impacts during the crisis. The relationship with earnings per share and the market
share price to earnings per share ratio both strengthened. Notably, during the crisis, the
relationships with the number of meetings, the institution's capital, and conservative accounting
practices, which were inverse prior to the crisis, turned positive. In contrast, the relationship
with compensation and rewards for the Board of Directors and external auditor wages, which
were positive before the crisis, became inverse during the crisis. This shift underscores the role
of emotional intelligence (reflected by the number of females on the board) in responding to
crises by enhancing performance and value while reducing costs and expenses. Specifically,
during the crisis, bonuses and compensation for the board, as well as external auditor wages,
became more cautious, directly addressing the risks faced by the institution. Additionally, the
necessity of holding meetings to address and resolve crisis-related issues caused the
relationship between the number of meetings and the institution's performance to become direct
during the crisis, reversing the pre-crisis inverse relationship. The results are consistent with
what each study indicated) Hall et al., 2024), (Bostrack, 2023, Ruqayyah et al., 2022), (Nouri,
2022), (Goleman, 2021), (Cherniss and Roche, 2020), (Khalil, 2019). (Elleuch et al., 2015).
The Role Of Emotional Intelligence in The Board Of Directors and Its Impact On The Performance and Value Of
Institutions and Conservative Practices In Light Of Crises (Applied Research On a
Sample Of Banks Listed On ISX)
136 ANGGARAN - VOLUME. 2, NO. 4, DESEMBER 2024
Chart (4): Comparing the relationship between emotional intelligence (number of
females on the board of directors) and variables during the period before the crisis and
during the crisis (Reference assembled by the author)
5. CONCLUSIONS
This study highlights the crucial role of emotional intelligence, particularly among
female board members, in enhancing governance and performance during crises. Emotional
intelligence positively correlated with financial metrics, such as earnings per share and market
share price ratios. Relationships with board dynamics, previously inverse, turned positive,
indicating a proactive governance approach. Cost management improved, with reduced board
compensation and auditor fees. Increased meeting frequency during crises emphasized active
crisis management. The study underscores the value of gender diversity on boards, advocating
for more female representation to leverage emotional intelligence in navigating economic
disruptions, especially in developing economies.
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