Gender diversity and corporate risk-taking: a literature review

Abstract

PurposeThe investigation of the relationship between gender diversity and corporate risk-taking is a recent stream of research. In this study, the authors propose an answer to the following main question: What do the authors know about gender effects in corporate risk-taking and how should we proceed?Design/methodology/approachIn order to ensure the quality and the objectiveness of the literature review, the authors selected articles published in journals that are simultaneously ranked by the Chartered Association of Business Schools (ABS, 2018) and by the Journal Citation Reports (JCR, 2018), focused on the Board of Directors (BoD) and Top Management Teams (TMT).FindingsThe literature review reveals that women's presence on the BoD and TMT impacts corporate risk-taking in different ways. Based on the analysis, it is possible to organize the extant findings in two major categories, according to gender measures, firm type and country of origin: (1) universal effects – women decrease firms' litigation risk, failure risk and operational risk while they have no significant effect on insolvency risk and; (2) contingent effects – women have contingent effects on financial risk, manipulation risk, total risk, idiosyncratic risk and systematic risk.Originality/valueCovering several different research fields, this study provides a comprehensive review concerning what the authors know regarding the effects of the BoD and TMT gender diversity in corporate risk-taking. The authors present a model summarizing empirical findings and propose a number of avenues for future research.

Men are from Mars, women are from Venus: on lenders’ stereotypical views and the implications for a firm’s debt

“…Regarding demand-side issues, a key result from management studies is that women act differently from men by displaying more risk-averse behaviour (for a recent and comprehensive review, see Teodósio et al, 2021). However, as already mentioned, these findings are generally based on experimental studies on gambling (Ahmed & Atif, 2021), and when managerial settings are specifically considered, there is no difference in decision making between men and women (Faccio et al, 2016;Johnson & Powell, 1994).…”

“…Regarding demand-side factors, some scholars argue that women-led firms are less likely to apply for a loan than men-led enterprises (Treichel & Scott, 2006) due to a higher risk aversion (Teodósio et al, 2021) or because they anticipate being rejected (Moro et al, 2017).…”

Human Resource Management and Diversity Management. Some Emerging Evidence about the Effects on Organizational Performance

“…Having both men and women at the top of an organization can positively affect various corporate performance measures. In a heterogeneous context, in fact, the chances of facing choices with broader and more articulated perspectives increase, the audience of talents widens, a beneficial competition is triggered, leadership styles emerge that can be successful: it is proven that women are particularly capable of communicating, managing relationships, preventing conflicts, sharing decisions and, often, also facing risk with greater caution (Teodósio et al, 2021;Li and Chen, 2018). The positive relationship between the presence of women and company performance has however for years been an unconsolidated result in the economic literature: some studies find a positive relationship (Smith et al, 2006), others a negative relationship (Adams et al, 2010), others they still find no effect of female presence on performance (Rose, 2007).…”

CFO gender in curbing CEO dominance on overpriced acquisition premiums

“…Likewise, Francis et al. (2013) and Teodosio et al. (2021) find that female CFOs report more conservative accounting figures than males, and Francis et al.…”