Board gender diversity and firm risk in UK private firms

Mahnoor Sattar, Pallab Kumar Biswas and Helen Roberts

Global Finance Journal, 2022, vol. 54, issue C

Abstract: This research aims to investigate the effect of board gender diversity on private firm risk. Using a sample of 27,352 UK private firms from 2005 to 2017, we report a negative association between board gender diversity and firm risk. In particular, we find that risk reduction is associated with women owner directors who may have a stronger incentive for better risk management. Firm risk is lower (higher) for boards with local (foreign) women directors suggesting that local market knowledge is more valuable for private firms. Lower director busyness in gender diverse boards is the channel that enables women directors to reduce firm risk by directing more attention to fiduciary responsibilities. Additional analysis reveals that more risky, small to medium-sized firms benefit the most from gender-diverse boards. Our findings are robust to alternate risk measurements and endogeneity corrections.

Keywords: UK private firms; Board gender diversity; Women owner directors; Firm risk; Women director nationality (search for similar items in EconPapers)
JEL-codes: G30 G34 M14 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1044028322000680
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:54:y:2022:i:c:s1044028322000680

DOI: 10.1016/j.gfj.2022.100766

Access Statistics for this article

Global Finance Journal is currently edited by Manuchehr Shahrokhi

More articles in Global Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().