University of Twente Student Theses


Board gender diversity and corporate risk-taking

Appelman, L.A. (2019) Board gender diversity and corporate risk-taking.

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Abstract:Increasing the proportion of females in the board of directors has become an increasingly contentious topic in the business environment. Quota’s and public pressure have resulted in more and more firms adding females to their board. The impact of this change has received attention from multiple scholarly investigations, but the effect remains unclear. In social psychological studies gender differences is a highly investigated topic, concluding that women are more risk averse than men. Based on this the following research questions for this thesis arose: How does board gender diversity impact a firm’s risk-taking in corporate financial decisions? Research dependence, human capital, agency and social identity theories argue that female directors can add valuable resources and perspectives to a board, resulting in a firm making better quality decisions and taking less risk. Using data from 164 UK firms from 2013-2017 this thesis investigated the effect of female board representation on stock return volatility, ROA volatility, leverage and R&D expenses. Also, a moderation effect of the presence of a female CEO or CFO is investigated. The overall results of the study show that the proportion of females in the board of directors doesn’t have an impact on the level of risk-taking of a firm, but that the relation is influenced by other firm or financial characteristics. However, interesting topics for further research are seen in the samples with manufacturing and trade firms and firms with a female CEO or CFO. The challenges of finding a direct relationship between board gender diversity and firm outcomes are explained.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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