Women on Boards of Philippine Publicly Traded Firms: Does Gender Diversity Affect Corporate Risk-Taking Behavior?

• Main Authors: Ong Yiu, Michelle Kris A., Ricafrente, Louie Angelo, Unite, Angelo A., Shi, Ailyn A., Sullivan, Michael J.
• Format: text
• Published: Animo Repository 2017
• Subjects: Board diversity; Corporate risk-taking; Philippine corporations; Econometric techniques; Gender and Sexuality; Gender, Race, Sexuality, and Ethnicity in Communication
• Online Access: https://animorepository.dlsu.edu.ph/res_aki/42; https://animorepository.dlsu.edu.ph/cgi/viewcontent.cgi?article=1045&context=res_aki
• Institution: De La Salle University

The idea that more women belong on corporate boards is attracting increased attention around the world. Some scholars argue that gender diversity on boards improves firm performance and induces more prudent corporate decision-making. This rationale is based on the hypothesis that women are less overconfident and are innately more risk-averse than men. Alternatively, other researchers argue that firms having more female directors are associated with greater corporate risk-taking as the profile of women making it to the board level has proven to be open to greater challenges and risks. Still another strand of literature argues that risk-aversion does not vary between homogeneously male boards and more gender-diverse boards. Thus, in this paper, we report results for our examination of the relationship between board diversity for Philippine firms on corporate risk-taking over the period 2003 to 2015. We use four alternative measures to proxy for corporate risk-taking and employ the two-step Blundell-Bond System Generalized Method of Moments estimation technique to account for endogeneity issues that may influence this relationship. Our findings show that we cannot definitively conclude that the relationship between board diversity and corporate risk-taking is negative. This suggests that the case for greater gender diversity on Philippine corporate boards should be based on fairness, social, and moral considerations, and not to try to improve the level of corporate risk-taking.