Women on Board: Does Boardroom Gender Diversity Really Affect Firm Risk?

Sila, Vathunyoo; Gonzalez, Angelica; Hagendorff, Jens

doi:10.2139/ssrn.2379025

Cited by 12 publications

(27 citation statements)

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“…These consist of two sets. The first set comprises firm characteristics: firm age (Miller & Triana, 2009; Nguyen et al, 2015) measured as the number of years since the company was founded; firm size (Adams & Ferreira, 2009; Carter et al, 2010) measured as the logarithm of total assets; the degree of firm internationalization (Masulis, Wang, & Xie, 2012; Oxelheim, Gregorič, Randøy, & Thomsen, 2013) calculated as the percentage of foreign sales; and the number of business segments (Adams & Ferreira, 2009; Sila, Gonzalez, & Hagendorff, 2016) tabulated by the four-digit SIC code classification .…”

Section: Context Sample Data Sources Measures and Methodsmentioning

confidence: 99%

“…The second set of variables are governance variables and involve the characteristics of the board and its members. These include Chairperson of the Board (COB) and Chief Executive Officer (CEO) duality, that is, COB & CEO duality (Bhagat & Bolton, 2008; Holm & Schøler, 2010; Singla, George, & Veliyath, 2010); board size (Rose, Munch-Madsen, & Funch, 2013; Sanders & Carpenter, 1998; Zahra, Priem, & Rasheed, 2007), measured as the number of directors on the board; board independence (Musteen, Datta, & Herrmann, 2009; Pérez-Calero Sánchez, Villegas-Periñán, & Barroso-Castro, 2013; Sila et al, 2016), calculated as the proportion of independent directors to board size; board ownership (Bhagat & Bolton, 2008; Carter et al, 2010), measured as the sum of the shares held by the board directors divided by the firm’s outstanding shares; and additional directorships (Carter et al, 2010), measured as the average number of all the extra board seats held by the firm’s board members. Also, included in the second set are board financial expertise or financial independent experts on the audit committee (FIEA; Bédard, Chtourou, & Courteau, 2004; Güner, Malmendier, & Tate, 2008), measured as the total number of independent directors with financial expertise and who sit on the audit committee, and foreign independent director (FID Indicator; Masulis et al, 2012; Oxelheim et al, 2013), measured as a dummy variable that equals one if the firm has at least one foreign independent directors, that is, independent directors domiciled outside the United States and zero otherwise.…”

Section: Context Sample Data Sources Measures and Methodsmentioning

confidence: 99%

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Board Gender Diversity in the STEM&F Sectors: The Critical Mass Required to Drive Firm Performance

Wiley

Monllor-Tormos²

2018

Journal of Leadership & Organizational Studies

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This study investigates the link between board gender diversity (BGD) and firm performance (FP). The analysis is conducted using Fortune 500 firms in the Science, Technology, Engineering, Mathematics, and Finance (STEM&F) sectors covering a period of seven years, from 2007 to 2013. The theoretical framework combines several theories that give shape to the critical mass effect of BGD on FP. This shape shows that below the critical mass threshold, BGD may represent a disadvantage to the board as it may facilitate the formation of subgroups, dysfunctional conflicts, and distrust. However, at or above the critical mass threshold, BGD facilitates better monitoring of management, greater resource provisions, and divergent thinking. To ensure sound results, this study addresses endogeneity concerns regarding omitted variable bias, reverse causality, and dynamic endogeneity. These results support a significant U-shaped relationship between the number of female directors and FP in the STEM&F sectors. That is, BGD yields higher FP when there is a critical mass of women on the board. This finding remains robust when alternative proxies for BGD and FP are employed and is consistent with the predictions of our theoretical framework. Our analysis also reveals that the positive effect of BGD on FP increases when there is at least a critical mass of 30% of women on a corporate board. This finding suggests that boards that have reached a critical mass of 30% of women present a favorable environment to capitalize on innovative ideas arising from BGD.

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Section: Context Sample Data Sources Measures and Methodsmentioning

confidence: 99%

Section: Context Sample Data Sources Measures and Methodsmentioning

confidence: 99%

Board Gender Diversity in the STEM&F Sectors: The Critical Mass Required to Drive Firm Performance

Wiley

Monllor-Tormos²

2018

Journal of Leadership & Organizational Studies

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“…In this section, the robustness of the main results is checked in three ways. First, we check for endogeneity issues, which are pervasive in all corporate governance studies (Sila, Gonzalez, & Hagendorff, 2016 specific firms or industries, that is, firms in less-risky industries-making it a nonrandom process (Sila et al, 2016).…”

Section: Robustness Checksmentioning

confidence: 99%

“…The prior literature suggests instrumental variable (IV) regression, such as the two-stage least squares (2SLS; Sila et al, 2016), and the Heckman two-stage model (Lara et al, 2017) to deal with omitted variables and self-selection bias, respectively. However, implementation of 2SLS requires an exogenous instrument-a variable that is closely related to an independent variable but has no impact on the dependent variable(s).…”

Section: Robustness Checksmentioning

confidence: 99%

Does board gender diversity influence voluntary disclosure of intellectual capital in initial public offering prospectuses? Evidence from China

Nadeem

2019

Corporate Governance

114

113

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Research question/issue Using a multitheoretic view of boards, this study examines the impact of boardroom gender diversity (BGD) on voluntary intellectual capital (IC) disclosure in initial public offering (IPO) prospectuses in China—the world's second‐biggest economy, which is moving from a planned economy to a market‐oriented one. Furthermore, this study also investigates the impact of family ownership on the relationship between BGD and IC disclosure in the Chinese environment, which is characterized by less‐developed corporate governance mechanisms. Research findings/insights Based on a comprehensive content analysis of Chinese IPO prospectuses between 2009 and 2017 and measuring disclosure index at 78 dimensions under six broad categories of IC, the empirical results document (a) a significant positive relation between BGD and IC disclosure—in line with resource dependence theory, (b) a significant negative impact of female independent directors on IC disclosure—opposite to agency theory predictions, and that (c) the BGD–IC disclosure relationship is generally stronger for firms with two or more women on boards—in line with critical mass theory in China. Finally, this study also reveals that family ownership has adverse impacts on the BGD–IC disclosure relationship. These results are robust to a battery of sensitivity analyses. Practitioner/policy implications This study provides positive capital market implications of BGD through enhanced IC disclosure in IPO prospectuses. In doing so, the study has important implications for regulators and top management teams in devising policies concerning female representation on boards and voluntary disclosure of IC to inform the market participants of the true value of the company.

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“…Loukil and Yousfi (2014) proved that women only affected financial risks through cash-related policies and influenced risk management irregularly [20]. Sila, Gonzalez and Hagendor (2014) [21] suggested that a BOD with a higher rate of women would be risk-free or less risky than that with men only. Starting from the previous studies on women's presence in the BOD, the following hypothesis is proposed:…”

Section: Tab 1: Handling Raw Datamentioning

confidence: 99%

Impact of women in the board of directors on business risk of Vietnamese firms

Linh¹,

Tran²,

Tran³

et al. 2016

EA-XXI

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Abstract. This article aims at assessing the influence of women in the board of directors (BOD) on risk management in Vietnamese firms. The study touches upon a sample of 284 companies listed on the HOSE (Ho Chi Minh City Stock Exchange -Vietnam) in the period of [2008][2009][2010][2011][2012][2013][2014]. Their data was regressed by the random effects model (REM) and the fixed effects model (FEM). To find out which method is the most appropriate, we used the Hausman test. The study clarifies women's role in society and the optimal ratio of women in the BOD to minimise risks at enterprises. The authors give recommendations to corporate managers regarding proper employment policies, in which the role of women is better recognised. The most valuable result of the presented research is a grounded finding of an optimal female ratio in the BOD recommended for the Vietnamese enterprises. In order to achieve a positive impact of women on the risks reduction at the enterprise, the suggested female ratio in the BOD should be 34.96%, which will help to keep the lowest risk exposure. Hence, it could be recommended to raise a number of women in the BODs to approximately 1/3 of the total amount of members. Business owners may take this into account when planning human resource policies to maximise business performance. Keywords: Women; Board of Directors; Impact; Firm; Risk, HOSE; Vietnam; Gender JEL Classification: J44; M19 DOI: https://doi.org/10.21003/ea.V160-15До Хоаі Лін кандидат економічних наук, викладач, заступник завідувача кафедри банківського менеджменту, Школа банківської справи та фінансів, Національний університет економіки, Ханой, В'єтнам Тран Тронґ Фонґ магістр економіки, викладач, Школа банківської справи та фінансів, Національний університет економіки, Ханой, В'єтнам Тран Ван Банґ бакалавр економіки, президент клубу молодих банкірів, асистент навчально-консультаційного центру з банківської справи, фінансів та безпеки, Національний університет економіки, Ханой, В'єтнам Нґуен Сонґ Фуонґ бакалавр економіки, асистент навчально-консультаційного центру з банківської справи, фінансів та безпеки, Національний університет економіки, Ханой, В'єтнам Вплив жінок, які беруть участь у роботі ради директорів в'єтнамських фірм, на запобігання ризиковим подіям у бізнесі Анотація. Метою цієї статті є оцінка впливу жінок у складі рад директорів в'єтнамських фірм на запобігання ризиковим подіям у бізнесі. У дослідженні використано вибірку з 284 компаній, внесених до реєстру Фондової біржі Хошимін у період 2008-2014 років. У своїй роботі автори роз'яснюють роль жінок у суспільстві, а також надають пояснення щодо оптимального співвідношення жінок і чоловіків у раді директорів із метою мінімізувати виникнення ризикових подій на підприємствах. Доведено доцільність збільшення кількості жінок до 1/3 від загальної кількості членів ради директорів. Окрім цього, надано рекомендації корпоративним менеджерам стосовно вироблення належної політики у сфері зайнятості, яка робила би роль жінок у роботі підприємств більш вагомою. Ключові слов...

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Women on Board: Does Boardroom Gender Diversity Really Affect Firm Risk?

Cited by 12 publications

References 0 publications

Board Gender Diversity in the STEM&F Sectors: The Critical Mass Required to Drive Firm Performance

Board Gender Diversity in the STEM&F Sectors: The Critical Mass Required to Drive Firm Performance

Does board gender diversity influence voluntary disclosure of intellectual capital in initial public offering prospectuses? Evidence from China

Impact of women in the board of directors on business risk of Vietnamese firms

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