Sustainable development through the effect of board diversity and CEO duality on corporate risk: Does the state‐owned enterprises matter?

Isabel Gallego‐Álvarez and María Consuelo Pucheta‐Martínez

Sustainable Development, 2022, vol. 30, issue 6, 1462-1476

Abstract: To date, not much research has been devoted to analyzing the impact of some corporate governance mechanisms (board diversity and CEO duality) on corporate risk. Consequently, we believe that it is necessary to study such topic in greater depth. The aim of this research is to provide further evidence of the impact that board diversity, specifically board specific skills, board tenure and board cultural diversity, as well as CEO duality, have on corporate risk. Additionally, our study also examines the moderating role of the state‐owned enterprises (SOEs) on the association between the three characteristics of board diversity and corporate risk, and between CEO duality and corporate risk. The theoretical framework used in this research is based on agency theory and resource dependence theory. The findings show that board specific skills and board cultural diversity have a negative effect on corporate risk, while board tenure does not affect it. On the other hand, CEO duality has a negative effect, which is against the prediction of our hypothesis. Our evidence also reveals a negative moderating effect of SOEs on the impact of board specific skills, board tenure and board cultural diversity on corporate risk. Additionally, SOEs do not moderate the negative impact of CEO duality on corporate risk. Our research contributes to past literature on corporate risk by concluding that some corporate governance mechanisms like board specific skills, board cultural diversity and CEO duality lessen it. The moderating role performed by SOEs with the relationship between board specific skills, board culture diversity, board tenure and corporate risk is also a relevant contribution.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/sd.2321

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:wly:sustdv:v:30:y:2022:i:6:p:1462-1476

Access Statistics for this article

Sustainable Development is currently edited by Richard Welford

More articles in Sustainable Development from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().