Impact of Risk on Gender Diversity and Board Size − Case Study Northern Europe

Over time, the impact of risk on corporate governance has become a highly analysed topic. One of the most important indicators is gender diversity, where the desire for gender equality has evolved year by year. At the same time, the size of the board of directors is also important in a company, because when there are more members, there are more opinions, which may lead to more discussions and hinder decision making. Thus, the period of uncertainty created by the Sars-Cov-2 pandemic has been of significant importance in presenting the importance of gender diversity. Therefore, the analysis of the link between risk and governance indicators (gender diversity and board size) was carried out on a sample of 286 companies in Northern Europe (Denmark, Finland, the Republic of Ireland, and Sweden). The research is carried out over a four-year period (2020-2023) to capture the period of the Covid-19 crisis, has a panel database, in which the dependent variables are two corporate governance indicators (presence of women on boards and number of people on the board) and one risk indicator (Z-Altman), and both risk (leverage, Z-Altman score and current liquidity), performance (economic profitability, financial return and EBITDA), and other indicators (total assets) were chosen as independent variables, as well as three corporate governance indicators (nominating committee, audit committee, and corporate governance committee). The most important results found in the research are the positive and significant relationship between leverage and board size, the negative and significant relationship between Z score and gender diversity.