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Board Gender Diversity and Its Risk Monitoring Role: Is it Significant?

Author

Listed:
  • Karren Lee-Hwei Khaw

    (Faculty of Business and Accountancy, University of Malaya, 50603 Kuala Lumpur, Malaysia)

  • Jing Liao

    (School of Economics and Finance, Massey Business School, Massey University, New Zealand)

Abstract

In recent years, there is an urgent call to strengthen board composition to safeguard against expropriation of shareholdersí 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 ëold boys clubí corporate boardrooms.

Suggested Citation

  • Karren Lee-Hwei Khaw & Jing Liao, 2018. "Board Gender Diversity and Its Risk Monitoring Role: Is it Significant?," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 14(1), pages 83-106.
    • Handle: RePEc:usm:journl:aamjaf01401_83-106
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    References listed on IDEAS

    as
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    Cited by:

    1. Lee Siew Tee & Ismail Nizam, 2020. "The Influence of Corporate Governance on Financial Performance Mediated by Gender Diversity," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 10(1), pages 61-79, January.
    2. Tankiso MOLOI & Tatenda NHARO & Modi HLOBO, 2021. "Relationship between Board Characteristics and Dividend Payment Policies," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 12(1), pages 30-52, June.
    3. Hidaya Othmani, 2021. "Does board gender diversity matter in the banking sector? Evidence from Tunisia," African Development Review, African Development Bank, vol. 33(1), pages 14-24, March.

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