The effects of gender on corporate risk management

Purpose This research reveals the effect of gender on corporate risk management. Female involvement in business and management has been a hot topic in recent years. The authors use emerging market data to determine the effects of female chairpersons and general managers on risk management and corporate governance. In particular, the authors consider the combination of different genders of the chairperson and general manager positions and test their contributions to risk control. This study aims to contribute to the academic community while making policy contributions and providing gender equality opportunities for female involvement at the management level. Design/methodology/approach This research uses empirical methods to show the effects of different chairperson and general manager gender combinations, with firm share crash risk and volatility used as risk indicators. This study considers several specific issues, such as bank–firm relationships and a firm’s political connections, which may increase the degree of risk-taking incentives at the firm’s management level. It also further explores the effect of female involvement as the chairperson and the general manager in those specific situations. Findings The results show that when the chairperson and the general manager are both male, the firm has significantly greater risk. Once a female assumes the chairperson or general manager position, the regression coefficient of gender becomes statistically insignificant, indicating lower risk level. When a firm has a director or manager who has expertise in bank relationships, a female general manager could reduce the degree of risk. A similar situation occurs when a firm has political connections, and the female chairperson can better monitor and supervise the firm and reduce the risk of share price crashes and volatility. Originality/value This research, unlike most past research, uses manager and chairperson combinations rather than merely female involvement to demonstrate that females at the management level could alleviate a firm’s degree of corporate risk. The effects of the female chairperson, who plays the monitoring role, and the female general manager, who operates the firm, are separated and analyzed. Furthermore, it extends such influences to contribution when the chairperson and general managers are of different genders.