Abstract/Summary

This thesis contributes to the growing literature on gender diversity in corporate leadership by examining its implications for risk and market behavior. Across its three main chapters, the thesis explores different dimensions of gender diversity within executive and boardroom settings. First, I investigate the relationship between board gender diversity and stock price crash risk, using a panel dataset of publicly listed UK firms. The findings reveal that board gender diversity does not have a statistically significant effect on crash risk. Furthermore, I examine the Davies Report as a policy intervention intended to promote female board representation. The results show that the increase in female directors following the report did not lead to a significant change in the association between board gender diversity and stock price crash risk. Next, I investigate the impact of female CFOs on stock price crash risk using a sample of UK listed public firms. The analysis reveals a negative and statistically significant association between the presence of female CFOs and crash risk, suggesting that firms led by female CFOs are less likely to experience extreme negative returns. Additionally, I show that this effect is more pronounced in firms characterized by less CEO power, higher levels of information opacity, or greater exposure to risk; conditions under which the role of the CFO in shaping financial transparency and risk management is especially critical. Finally, I explore how financial markets respond to the appointment of female executives. The results indicate that, on average, neither the bond market nor the stock market exhibit a statistically significant reaction to such appointments. However, further analysis reveals that the bond market responds positively to female outside appointments, suggesting that bondholders may interpret external female hires as a signal of positive organizational change or improved governance.