How Do Women on Board Reduce a Firm’s Risks to Ensure Sustainable Performance during a Crisis?

Rubeena Tashfeen, Irfan Saleem, Muhammad Ashfaq (), Umara Noreen and Muhammad Shafiq
Additional contact information
Rubeena Tashfeen: UCP Business School, University of Central Punjab, Lahore 54590, Pakistan
Irfan Saleem: Faculty of Business, Sohar University, Sohar 311, Oman
Muhammad Ashfaq: Department of Finance and Management, IU International University of Applied Sciences, 53604 Bad Honnef, Germany
Umara Noreen: College of Business Administration, Prince Sultan University, Riyadh 12435, Saudi Arabia
Muhammad Shafiq: Department of Project & Operations Management, Islamia University of Bahawalpur, Bahawalpur 63100, Pakistan

Sustainability, 2023, vol. 15, issue 14, 1-20

Abstract: The research applies the Upper Echelons Theory and the Lehman Sisters Hypothesis to explain how women board members use investment, financial, and liquidity techniques to reduce risk and increase a firm’s value. An original dataset of listed US companies is analyzed to show how women strategists contribute to value creation and mitigate stock volatility and bankruptcy. A simultaneous equations approach captures the interplay between a company’s use of debt and financial derivatives. According to this research, organizations that employ derivative instruments benefit more from having women in advisory roles because women encourage proactive risk management and develop effective risk control measures. The research implies that businesses should actively promote gender equality on their boards rather than merely recognizing the need for diversity.

Keywords: woman risk strategist; upper echelons theory; Lehman sisters hypothesis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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