Women in the boardroom and their impact on default risk Pitch research presentation by Searat Ali RBUS6914 (Research Process in Business) University of Queensland Linking top with bottomline

(B) Basic Research Question Does the boardroom gender diversity reduce default risk?

(C) Key paper(s) Recent Guru Rank X Sila, V., Gonzalez, A., Hagendorff, J. (2016). Women on board: Does boardroom gender diversity affect firm risk?. Journal of Corporate Finance. 36, 26-53 (A* journal). Chen, S., Ni, X., Tong, J. Y. (2015). Gender Diversity in the Boardroom and Risk Management: A Case of R&D Investment. Journal of Business Ethics. 1-23 (A journal). Adams, R. B., Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics. 94, 291-309 (A* journal)

(D) Motivation/ Puzzle Consequences of default? Why default? Solution to it? Gender diversity reforms around the globe Australia Default risk Gap in literature Gender Reforms X Lehman brother vs Lehman sisters No study Mixed findings Why: Endogeneity Adams et al 2009

H3: Substitution effect (E) Idea H1: Impact H3: Substitution effect H2: Channel Boardroom gender diversity is likely to have a significant impact on default risk due to the monitoring ability of the women. Specifically, women on board may improve the effectiveness of the board in monitoring the opportunistic behaviour of management and mitigating the information asymmetry between management and shareholders, and are thus likely to reduce the default risk (Agency theory). H1: Women on board reduce default risk H2: Women on board reduce default risk through the channel of information asymmetry Women on board are considered substitute monitoring mechanism to weak corporate governance in the literature, however, the proxy of corporate governance (e.g., G-index) used in the literature is external but not internal. The idea is to examine if the gender diversity is the substitute to internal monitoring mechanisms (e.g., independence of board and audit committee) or external monitoring mechanisms (e.g., ownership structure and product market competition). H3: Women on board is substitute to external governance but not to internal governance.

Australian non-financial firms (F) Data Sampling Context Australian non-financial firms Sample size 800 firms, 6400 observations Sample period 2008 to 2015

(F) Data Proxies for default risk Merton distance to default Credit default event Credit default spread

(F) Data Proxies for boardroom gender diversity % of women on board Blau index Women dummy

(F) Data Proxies for information asymmetry/stock liquidity (Channel hypothesis) TWQS Trading cost LM Immediacy Amihud Price impact

Product market competition Ownership concentration (F) Data Proxies for internal and external governance mechanisms (Substitution hypothesis) Internal Board independence External Product market competition Ownership concentration

(F) Data Sources SIRCA Bloomberg Morningstar

(F) Data Other issues Data handling Generalizability Variation

Split sample/ interaction terms (H) Tools Baseline regressions Split sample/ interaction terms Endogeneity bias Lagged FE 2SLS GMM PMS DID Pooled OLS Fixed effect Between effect Fixed effect Partial vs full mediation

(H) Tools Additional analysis Software Research assistant GFC Balanced data Top 200 ASX firms Additional analysis Research assistant Software STATA

Boardroom gender diversity (H) What's New? Boardroom gender diversity Channel + Substitution effects Default risk X

Market microstructure (H) What's New? Gender, internal and external governance Corporate finance Market microstructure Asset pricing Default risk X Information asymmetry/ stock liquidity

Regulators & researchers (I) So What? Regulators & researchers Firms Investors Policy making Portfolio management Cost of capital

(J) Contribution? Value addition to the literature that investigates the linkage between boardroom gender diversity and risk by providing the first comprehensive and robust evidence on the relationship between women on board and default risk.

(K) Other Considerations Collaboration Target journal Risk assessment Scope Stokes (2013

Collaboration Idea Tool Data

Accounting and Finance Journal of Corporate Finance Target journals Accounting and Finance Journal of Corporate Finance Ranking Tension Scope Topic/country

Risk assessment No result HIGH Obsolescence NO Competition

International evidence Scope/pipeline Gender diversity International evidence Default risk

Stokes (2013) Innovation and creativity Passion of Authors Training Passion of Journals

Research Feedback Q & A