Market Risk Disclosures and Board Gender Diversity in Gulf Cooperation Council (GCC) Firms

• Author: Syed Mujahid Hussain,Khamis Hamed Al‐Yahyaee,Ahmed Khamis Al‐Hadi
• DOI: http://doi.org/10.1111/irfi.12123
• Date: 01 December 2017
• Published date: 01 December 2017

Market Risk Disclosures and Board

Gender Diversity in Gulf

Cooperation Council (GCC) Firms

KHAMIS HAMED AL-YAHYAEE

†

,AHMED KHAMIS AL-HADI

‡

AND

SYED MUJAHID HUSSAIN

†

†

Department of Economics and Finance, College of Economics and Political Science,

Sultan Qaboos University, Muscat, Oman and

‡

Curtin Business School, 407, Curtin University, Bentley, WA, Australia

ABSTRACT

We investigate the impact of board gender diversity on corporate risk

reporting for Gulf Cooperation Council (GCC) financial firms. Recent

developments and improvements of corporate governance in the GCC

markets suggest that firms in the GCC have become more transparent with

less information asymmetry. However, we find that the presence of female

directors in the boards of financial institutions suppresses the positive

association between corporate governance and market risk disclosures for

the period between 2007 and 2011. These findings suggest that culture

and conservatism nature of GCC societies persist in the GCC business

environment. Our results are robust to alternative specifications and

endogeneity tests.

JEL classification: M40; M41; M48; J16 and D72

I. INTRODUCTION

Female representation on the board of directors is a current and contentious

topic across many jurisdictions, and, in particular, debate is ongoing regarding

whether female director on the board benefits a firm’s monitoring capacity.

Prior literature (e.g., Adams and Ferreira 2009; Srinidhi et al. 2011) has found

that female director adds value to the firm’s board monitoring capabilities.

However, most empirical research on this topic has been restricted to developed

markets. The generalizability of such findings may not extend across national

boundaries due to different regulatory and economic environments, cultural

differences, the size of capital markets, and the effectiveness of governance

mechanisms. Hence, the importance and value of various governance

structures, including gender diversity, should be considered and examined in

homogenous societies. In this study, we contribute to the literature by

© 2017 International Review of Finance Ltd. 2017

International Review of Finance, 2017

DOI: 10.1111/irfi.12123

International Review of Finance, 17:4, 2017: pp. 645–658

DOI: 10.1111/irfi .12123

© 2017 International Review of Finance Ltd. 2017