Board Gender Diversity and Its Risk Monitoring Role: Is It Significant

Khaw, Karren Lee Hwei and Liao, Jing (2018) Board Gender Diversity and Its Risk Monitoring Role: Is It Significant. Asian Academy of Management Journal of Accounting and Finance, 14 (1). pp. 83-106. ISSN 1823-4992

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Official URL: https://doi.org/10.21315/aamjaf2018.14.1.4

Abstract

In recent years, there is an urgent call to strengthen board composition to safeguard against expropriation of shareholders’ interest and to reinforce public confidence, specifically in a weaker governance setting. Board gender diversity receives considerable attention within the issues of corporate governance. This is because female directors are found to be more active in monitoring activities, cautious in decision making, less aggressive and risk averse as compared to male directors. We support this argument with evidence from a sample of listed firms in Malaysia. In line with the literature, we show that female directors play a significant monitoring role in reducing corporate risk taking behaviour. Our results are robust to endogeneity concern. Since board gender diversity plays a significant risk monitoring role, we recommend that there should be a continuous call to appoint female directors to the boardrooms among Malaysian listed firms to diversify the ‘old boys club’ corporate boardrooms.

Item Type: Article
Uncontrolled Keywords: Board gender diversity; Corporate governance; Corporate risk taking; Female directors; Risk monitoring
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Business and Accountancy
Depositing User: Ms. Juhaida Abd Rahim
Date Deposited: 15 Jul 2019 04:54
Last Modified: 15 Jul 2019 04:54
URI: http://eprints.um.edu.my/id/eprint/21615

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