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Board diversity and the timing of drug recalls: Implications for public health and shareholder value

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  • Kim, Minjae
  • Noh, Ki Bum

Abstract

This study examines the influence of board diversity on firms’ strategic decision-making and shareholder value, analyzing pharmaceutical companies’ responses to adverse event reports. Employing duration analysis, we find that firms with higher proportions of foreign and female directors on their boards are significantly more likely to issue prompt recalls following adverse event reports. Additionally, our results demonstrate that delayed recalls by firms with less diverse boards lead to substantial negative stock returns. These findings underscore the importance of board diversity in enhancing public health protection and reducing financial risk.

Suggested Citation

  • Kim, Minjae & Noh, Ki Bum, 2025. "Board diversity and the timing of drug recalls: Implications for public health and shareholder value," Finance Research Letters, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:finlet:v:80:y:2025:i:c:s1544612325006476
    DOI: 10.1016/j.frl.2025.107387
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