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Female CFOs, leverage and the moderating role of board diversity and CEO power

Schopohl, L. ORCID:, Urquhart, A. ORCID: and Zhang, H. (2021) Female CFOs, leverage and the moderating role of board diversity and CEO power. Journal of Corporate Finance, 71. 101858. ISSN 0929-1199

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To link to this item DOI: 10.1016/j.jcorpfin.2020.101858


This paper investigates the extent to which female Chief Financial Officers (CFOs) affect corporate leverage. We examine female CFOs in UK firms and find that they significantly reduce the leverage of the firm; however, a female CFO’s ability to influence corporate leverage is moderated by the senior decision-making environment in the firm. In particular, female CFOs are more effective in reducing leverage in firms with boards that are diverse with respect to gender, nationality and age, and in firms where the Chief Executive Officer (CEO) is not overly powerful. In addition, we find that externally appointed female CFOs reduce leverage more, in line with them having less allegiances to other top managers and greater scope to deviate from existing policies. Our work contributes to the literature by examining the conditions under which genderspecific risk-taking preferences lead to observable effects on corporate outcomes.

Item Type:Article
Divisions:Henley Business School > ICMA Centre
ID Code:95053


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