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Women are from Venus, Men are from Mars: But Do the Financial Markets Know It?

Author

Listed:
  • Amelie Charles

    (Audencia, School of Management)

  • Etienne Redor

    (Audencia, School of Management)

Abstract
Although existing research has documented in very wide and detailed terms the impact of the presence of female directors on the financial performance of firms, very little is known about the link between board composition and corporate risk-taking. Drawing from the academic literature demonstrating that women are more risk averse than men, herein, we analyze the relationship between gender diversity and firm risk. In particular, we study whether the appointment of female directors affects firm risk level. We use three different measures of risk (total risk, systematic risk, and unsystematic risk) and compare firm risk level before the addition of new members (both male and female) to the corporate board to the risk level after such additions. Our results indicate that there is no significant gender difference in the risk level before and after the appointment of a director, when the whole sample is considered. However, some differences appear when the analysis is conducted by industry. Similarly, we show that the appointment of a female director has a greater impact on firm risk in female-director-friendly firm.

Suggested Citation

  • Amelie Charles & Etienne Redor, 2014. "Women are from Venus, Men are from Mars: But Do the Financial Markets Know It?," Economics Bulletin, AccessEcon, vol. 34(1), pages 589-604.
    • Handle: RePEc:ebl:ecbull:eb-14-00109
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    References listed on IDEAS

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    Cited by:

    1. Jidong Zhang & Jing Han & Meiqun Yin, 2018. "A female style in corporate social responsibility? Evidence from charitable donations," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 15(3), pages 185-196, August.

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    More about this item

    Keywords

    Board Composition; Directors; Gender; Total Risk; Systematic Risk; Unsystematic Risk.;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G3 - Financial Economics - - Corporate Finance and Governance

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