Does gender diversity on corporate boards increase risk‐taking?

Loukil, Nadia; Yousfi, Ouidad

doi:10.1002/cjas.1326

Cited by 113 publications

(97 citation statements)

References 114 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The findings document that on average, the boards of directors in the MENA region firms are dominated by Arab males. This low representation of women, foreigners, and non‐Arab directors on board rooms is in line with evidence coming from most developing countries (e.g., Loukil & Yousfi, ; Mahadeo et al, ; Salloum et al, ).…”

Section: Empirical Analysis and Discussionsupporting

confidence: 85%

Board diversity, corporate governance, corporate performance, and executive pay

2018

View full text Add to dashboard Cite

Departing from previous studies, this paper investigates the impact of corporate board diversity on corporate performance and executive pay within the context of Middle East and North African countries. Our sample includes a balanced panel of 600 firm‐year observations, consisting of 100 individual firms drawn from five Middle Eastern countries (Egypt, Jordan, Oman, Saudi Arabia, and United Arab of Emirates) over the 2009–2014 period. The findings are three‐fold. First, board diversity, as measured by director gender and nationality, has a positive effect on corporate financial performance. Second, the relationship between board diversity and corporate performance is stronger in better governed firms than their poorly governed counterparts. Finally, board diversity, as measured by director gender, ethnicity, and nationality, enhances the pay‐for‐performance sensitivity but not the actual executive pay. Our results suggest that decisions about board diversity are not merely influenced by moral values; they arise because of the cost–benefit considerations of what diversity can bring to the firm. The findings are robust to controlling for different alternatives of board diversity measures, corporate governance proxies, corporate outcomes, and types of endogeneities.

show abstract

Section: Empirical Analysis and Discussionsupporting

confidence: 85%

Board diversity, corporate governance, corporate performance, and executive pay

2018

View full text Add to dashboard Cite

show abstract

“…Resource dependence theory suggests that boards provide an essential link between a charity and the powerful stakeholders who provide critical resources needed to be successful (Loukil & Yousfi, 2015;Pfeffer & Salancik, 1978;Ntim, 2016). This theory has also been criticised for suggesting that CG practices should be pursued in order to mainly advance the strategic interests of organisations (i.e., obtain fund and maximise profit), and thus fails to recognise the need for organisations to be accountable and responsible to a broader range of stakeholders (Barton & Gordon, 1987;Branco & Rodrigues, 2006).…”

Section: Charity Tbd Cg Cs and Fp Theoriesmentioning

confidence: 99%

“…In particular, it has been suggested that TBD (gender and ethnic diversity) can perform a vital role in enhancing board effectiveness by increasing board independence from management and also by bringing diverse ideas, perspectives, knowledge and experience to the board (Buse et al, 2016;Carter et al, 2003;Das & Dey, 2016;Estelyi & Nisar, 2016;Loukil & Yousfi, 2015).…”

Section: Charity Tbd and Csmentioning

confidence: 99%

“…This implies that charities with gender/ethnically diverse boards may not need to employ higher levels of leverage in order to monitor and encourage trustees to act in line with stakeholders' interests. Further, and from legitimisation perspective, board diversity can enhance organisation's reputation/image by increasing public accountability and confidence (Loukil & Yousfi, 2015;Ntim & Soobaroyen, 2013;Sila et al, 2016;Terjesen & Sealy, 2016). In contrast, TBD can increase managers' power and influence over board decisions by appointing a few women and ethnic minorities mainly for symbolic reasons (Estelyi & Nisar, 2016;Gyapong et al, 2016).…”

Section: Charity Tbd and Csmentioning

confidence: 99%

See 1 more Smart Citation

Trustee board diversity, governance mechanisms, capital structure and performance in UK charities

Elmagrhi

Ntim

Malagila

et al. 2018

View full text Add to dashboard Cite

Purpose: We investigate the association among trustee board diversity (TBD), corporate governance (CG), capital structure (CS) and financial performance (FP) using a sample of UK charities. Specifically, we investigate the effect of TBD on CS, and ascertain whether CG quality moderates the TBD-CS nexus.Additionally, we examine the impact of CS on FP, and ascertain whether the CS-FP nexus is also moderated by TBD and CG quality.Design/methodology/approach: We employ a number of multivariate regression techniques, including ordinary least squares, fixed-effects, lagged-effects and two-stage least squares to rigorously analyse the data and test the hypotheses.Findings: First, we find that trustee board gender diversity has a negative effect on CS, but this relationship holds only up to the point of having three women trustees. We find similar, but relatively weak results for the presence of Black, Asian and Minority Ethnic trustees. Second, we find that the TBD-CS nexus depends on the quality of CG with the relationship being stronger in charities with higher frequency of meetings, independent CG committee, and larger trustee and audit firm size. Third, we find that CS structure has a positive effect on FP, but this is moderated by TBD and CG quality. Our evidence is robust to different econometric models that adjust for alternative measures and endogeneities. We interpret our findings within the explanations of a theoretical perspective that captures insights from different CG and CS theories. Originality/value: Existing studies on TBD, CG, CS and FP in charities are rare. Our study distinctively attempts to address this empirical lacuna within the extant literature by providing four new insights with specific focus on UK charities. First, we provide new evidence on the relationship between TBD and CS.Second, we offer new evidence on the moderating effect of CG on the TBD-CS nexus. Third, we provide new evidence on the effect of CS on FP. Finally, we offer new evidence on the moderating effect of TBD and CG on the CS-FP nexus.

show abstract

“…Loukil and Yousfi 2016;Chen et al 2016;Faccio et al 2016;Baixauli-Soler et al 2015;Lenard et al 2014). Though these studies were conducted in different environmental settings, research findings were significantly aligned as they consistently reported inverse relationships between elements of board diversity and corporate risk-taking.…”

Section: H₀: Ceo Non-duality Is Negatively Associated With Corporate mentioning

confidence: 81%

Board Rudiments and the Executive Attitude Towards Corporate Risk-Taking

Lawal¹

2018

IJFR

View full text Add to dashboard Cite

This paper examines the effect of key board distinctiveness on managerial risk-taking behaviour. Using a total sample of 121 firms made up of 1,166 corporate directors and 847 firm-year observations, the study finds robust evidence across the three stages of estimation that suggests power separation in terms of CEO non-duality is negatively associated with executive risk-taking due to enhanced board assertiveness and independence. Board size is inversely associated with the variability of market value measure both within and at inter-firm levels. With average board membership in the study sample made up of 10 directors, the study finds crucial empirical evidence that points to the key benefits of large board configuration including the social capital, diversity of thoughts, knowledge, and experience, effectiveness and vigilance which curtails executive entrenchment. In contrast, the paper records positive association between the presence of foreign directors and corporate risk-taking. Due to their wealth of experiences, foreign directors tend to have more strategic sense of purpose and are likely not to hesitate in taking appropriate risk decisions when it really matters. While the paper finds little evidence that suggests a within-firm positive relationship between board independence and managerial risky propensities, there was no evidence found to indicate that board quality and ethnic diversity affects corporate risk-taking.

show abstract

Does gender diversity on corporate boards increase risk‐taking?

Cited by 113 publications

References 114 publications

Board diversity, corporate governance, corporate performance, and executive pay

Board diversity, corporate governance, corporate performance, and executive pay

Trustee board diversity, governance mechanisms, capital structure and performance in UK charities

Board Rudiments and the Executive Attitude Towards Corporate Risk-Taking

Contact Info

Product

Resources

About