Women directors’propensity towards risk
in technology ﬁrms
Syed Shafqat Mukarram, Tahira Ajmal and Abubakr Saeed
Purpose –This study aims to investigate theimpact of the presence of women directors on firm’s risk-
taking behavior in industries where innovation is pivotal and how this impact varies across ownership
Design/methodology/approach –A sample of 71 listed technology firms on the National Stock
Exchange of India for the periodof 2008 to 2013 was used. Generalized method of moment estimation
techniquewas used for data analysis.
Findings –Resultsreveal a positive impact of the presence of women directorson technology firms’ risk-
taking behavior measured in terms of R&D spending, which is in contrast to the traditional notion that
women are risk-averse.Further, results also reveal that family ownership negatively affectsthe impact of
the presenceof women directors on risk takingin technology firms.
Practical implications –The findings of the studysuggest that females are risk takers in the contextof
R&D-intensive technologyfirms, thus providing new insight for policymakersto formulate more effective
board genderdiversity policies.
Originality/value –Based on the integration of agency and behavioral theories, it is suggested that
female executivesmay be risk-averse or risk-takers depending on contextualfactors such as innovation
and ownership,which drive the impact of the presenceof women directors on firms’ risk-takingbehavior.
Keywords Innovation, Women directors, Ownership, Risk-taking
Paper type Research paper
Debate on gender diversity at the corporate board level is growing in the board literature
that spells out various functions of board room gender diversity. Gender-diverse boards are
more efficient in monitoring of agents and ensure that firms maintain the ethical standards,
thus minimizing the ineffective use of shareholders’ funds that can be misused (Galbreath,
2011). In the same vein, Adams and Ferreira (2009) suggested that women directors are
not from the “old boys club” and it closely relates to the idea of independent directors.
Another important feature is thatwomen on board create value by bringing different opinion,
perspective and experience to the table (Mathisen et al., 2013) which leads to better
decision-making (Davies,2011). In addition, self-evident social justice view is that a gender-
diverse board is a step toward equal opportunities for females at the upper echelons of the
firm (Dowling and Aribi, 2013).
Financial decisions and economic interactions involve some sort of risk-return trade-off that
requires proper assessment and accordingly execution of these decisions (Shim and
Siegel, 1987). Risk choices of board members are likely to shape such decisions and
actions. Corporate board members have different characteristics like beliefs, personalities,
gender, ethnicity, qualification, etc. These characteristics, particularly gender, may be able
to explain different risk-taking choices of firms (Sila et al.,2016). The influence of women
directors on firm decision-making and outcomes including firm’s risk-taking both deserve
Syed Shafqat Mukarram is
PhD Scholar at the
COMSATS Institute of
Tahira Ajmal and
Abubakr Saeed are both
based at the Department of
COMSATS Institute of
Received 10 September 2017
Revised 15 November 2017
Accepted 30 November 2017
DOI 10.1108/CG-09-2017-0213 VOL. 18 NO. 2 2018, pp. 353-367, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 353