Does board gender diversity weaken or strengthen executive risk-taking incentives?

Pattanaporn Chatjuthamard, Pornsit Jiraporn, Sang Mook Lee

Research output: Contribution to journalArticlepeer-review

15 Scopus citations


We investigate the effect of board gender diversity on managerial risk-taking incentives. Our results demonstrate that companies with stronger board gender diversity provide more powerful executive risk-taking incentives. It appears that female directors’ risk aversion exacerbates managers’ risk aversion, resulting in a sub-optimal level of risk-taking. To offset this tendency for too little risk, companies are induced to provide stronger risk-taking incentives. Specifically, an increase in board gender diversity by one standard deviation raises vega by 10.3%. Further analysis corroborates the results, including propensity score matching, entropy balancing, and an instrumental-variable analysis. Endogeneity appears to be unlikely, suggesting that female directors are not merely associated with, but probably bring about stronger risk-taking incentives.

Original languageEnglish (US)
Article numbere0258163
JournalPloS one
Issue number10 October
StatePublished - Oct 2021

All Science Journal Classification (ASJC) codes

  • General


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