Director Characteristics, Gender Balance and Insolvency Risk: An Empirical Study

Wilson, Nick; Altanlar, Ali

doi:10.2139/ssrn.1932107

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Director Characteristics, Gender Balance and Insolvency Risk: An Empirical Study

54 Pages Posted: 22 Sep 2011

See all articles by Nick Wilson

Nick Wilson

University of Leeds - Credit Management Research Centre; University of Leeds - Division of Accounting and Finance; University of Leeds - Faculty of Business

Ali Altanlar

University of Leeds - Credit Management Research Centre; University of Leeds - Division of Accounting and Finance

There are 2 versions of this paper

Date Written: September 22, 2009

Abstract

This study examines the characteristics of the directors and owners of private companies in relation to insolvency risk, with a specific focus on the incidence and impact of female directors. We analyse data on over 900,000 limited companies in 2007-8 including over 17,000 that ceased trading due to insolvency. In the context of an enhanced failure prediction model, which controls for a wide range of company, industry characteristics and governance, we isolate the effects of having female directors on the likelihood of insolvency. The results provide compelling evidence of a relationship between the gender composition of directorships and insolvency risk.

Keywords: Board Diversity, Gender, Insolvency Risk

Suggested Citation: Suggested Citation

Wilson, Nicholas and Altanlar, Ali, Director Characteristics, Gender Balance and Insolvency Risk: An Empirical Study (September 22, 2009). Available at SSRN: https://ssrn.com/abstract=1932107 or http://dx.doi.org/10.2139/ssrn.1932107