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Does gender diversity on corporate boards increase risk-taking?

Author

Listed:
  • Nadia Loukil

    (ESSECT - Ecole Supérieure des Sciences Economiques et Commerciales de Tunis - Université de Tunis)

  • Ouidad Yousfi

    (MRM - Montpellier Research in Management - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier)

Abstract

We study the impact of board gender diversity on firm risk‐taking in a developing market. Our study is drawn from a sample of 30 Tunisian‐listed firms between 1997 and 2010. First, we found that women have a risk perception that leads to risk avoidance behaviour: the presence of women directors, even when there is one woman director, is positively associated with cash ratio. Second, we showed no significant relationship between board gender diversity and the propensity to take strategic or financial risk‐taking. Third, the presence of state officer/bureaucrats and/or politically connected women have a positive effect on cash holding and investment opportunities. Finally, we found that foreign investors do not invest in firms with gender‐diverse boards. We conclude with a discussion of contributions to scholarship and practice, and present avenues for future research. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.

Suggested Citation

  • Nadia Loukil & Ouidad Yousfi, 2016. "Does gender diversity on corporate boards increase risk-taking?," Post-Print hal-02015753, HAL.
    • Handle: RePEc:hal:journl:hal-02015753
    DOI: 10.1002/cjas.1326
    as

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    Cited by:

    1. María José Ibáñez & Felipe Vásquez Lavin & Roberto D. Ponce Oliva, 2023. "Female Underperformance Hypothesis Revisited: Methodological Review and Empirical Testing," SAGE Open, , vol. 13(4), pages 21582440231, December.
    2. Camélia Radu & Nadia Smaili, 2022. "Board Gender Diversity and Corporate Response to Cyber Risk: Evidence from Cybersecurity Related Disclosure," Journal of Business Ethics, Springer, vol. 177(2), pages 351-374, May.
    3. Farzan Yahya & Li Meiling & Chien‐Chiang Lee & Muhammad Waqas & Zhang Shaohua, 2022. "Gender diversity, sustainability reporting, CEO overconfidence, and efficient risk‐taking: Evidence from South Asian agri‐food industry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(3), pages 219-238, September.
    4. Bello Lawal & Mohammed Nuhu, 2021. "Board Diversity or Tokenism: A Case for Social Inclusion and an Efficiency Model," Applied Finance and Accounting, Redfame publishing, vol. 7(1), pages 22-31, February.
    5. Ali Amin & Ramiz ur Rehman & Rizwan Ali & Ridzwana Mohd Said, 2022. "Corporate Governance and Capital Structure: Moderating Effect of Gender Diversity," SAGE Open, , vol. 12(1), pages 21582440221, March.
    6. Ana Beatriz Hernández-Lara & Juan Pablo Gonzales-Bustos & Amado Alarcón-Alarcón, 2021. "Social Sustainability on Corporate Boards: The Effects of Female Family Members on R&D," Sustainability, MDPI, vol. 13(4), pages 1-13, February.
    7. Farzan Yahya & Ghulam Abbas & Ammar Ahmed & Muhammad Sadiq Hashmi, 2020. "Restrictive and Supportive Mechanisms for Female Directors’ Risk-Averse Behavior: Evidence From South Asian Health Care Industry," SAGE Open, , vol. 10(4), pages 21582440209, October.
    8. Kinateder, Harald & Choudhury, Tonmoy & Zaman, Rashid & Scagnelli, Simone D. & Sohel, Nurul, 2021. "Does boardroom gender diversity decrease credit risk in the financial sector? Worldwide evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 73(C).
    9. Masturah Malik & Rohami Shafie & Ku Nor Izah Ku Ismail, 2021. "Do risk management committee characteristics influence the market value of firms?," Risk Management, Palgrave Macmillan, vol. 23(1), pages 172-191, June.
    10. Poletti-Hughes, Jannine & Briano-Turrent, Guadalupe C., 2019. "Gender diversity on the board of directors and corporate risk: A behavioural agency theory perspective," International Review of Financial Analysis, Elsevier, vol. 62(C), pages 80-90.
    11. Alharbi, Rana & Elnahass, Marwa & McLaren, Josie, 2022. "Women directors and market valuation: What are the “Wonder Woman” attributes in banking?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    12. Ankur Shukla & Narayanasamy Sivasankaran & Prakash Singh & Ayyaluswamy Kanagaraj & Shibashish Chakraborty, 2021. "Do Women Directors Impact the Risk and Return of Indian Banks?," IIM Kozhikode Society & Management Review, , vol. 10(1), pages 44-65, January.
    13. Maria Giuseppina Bruna & Rey Dang & Marie-José Scotto & Aymen Ammari, 2019. "Does board gender diversity affect firm risk-taking? Evidence from the French stock market," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(4), pages 915-938, December.
    14. Ernest Gyapong & Ammad Ahmed & Collins G Ntim & Muhammad Nadeem, 2021. "Board gender diversity and dividend policy in Australian listed firms: the effect of ownership concentration," Asia Pacific Journal of Management, Springer, vol. 38(2), pages 603-643, June.
    15. John K. Malagila & Alaa M. Zalata & Collins G. Ntim & Ahmed A. Elamer, 2021. "Corporate governance and performance in sports organisations: The case of UK premier leagues," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 2517-2537, April.
    16. Nguyen, Thi Hong Hanh & Ntim, Collins G. & Malagila, John K., 2020. "Women on corporate boards and corporate financial and non-financial performance: A systematic literature review and future research agenda," International Review of Financial Analysis, Elsevier, vol. 71(C).
    17. Sabeeh Ullah & Yasir Kamal, 2017. "Board Characteristics, Political Connections, and Corporate Cash Holdings: The Role of Firm Size and Political Regime," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 9(1), pages 157-179, March.
    18. Yang, Hanping & Xue, Kunkun, 2023. "Board diversity and the marginal value of corporate cash holdings," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    19. Elnahass, Marwa & Alharbi, Rana & Mohamed, Toka S. & McLaren, Josie, 2023. "The Nexus among board diversity and bank stability: Implications from gender, nationality and education," Emerging Markets Review, Elsevier, vol. 57(C).
    20. Cong-Duc Tran & Minh-Tuan Phung & Fu-Ju Yang & Yi-Hsien Wang, 2020. "The Role of Gender Diversity in Downside Risk: Empirical Evidence from Vietnamese Listed Firms," Mathematics, MDPI, vol. 8(6), pages 1-22, June.
    21. Ayman Hassan Bazhair, 2023. "Board Governance Mechanisms and Capital Structure of Saudi Non-Financial Listed Firms: A Dynamic Panel Analysis," SAGE Open, , vol. 13(2), pages 21582440231, May.

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