Gender Diversity and Securities Fraud

66 Pages Posted: 24 Jul 2014

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University; Birmingham Business School; European Corporate Governance Institute (ECGI)

T.Y. Leung

Hong Kong Shue Yan College

Oliver M. Rui

China Europe International Business School (CEIBS); affiliation not provided to SSRN

Multiple version iconThere are 3 versions of this paper

Date Written: July 24, 2014


We formulate theory and set forth a first-ever empirical analysis of the impact of board of director gender diversity on the broad spectrum of securities fraud, generating three main insights. First, the examined data show strong evidence consistent with the view that the importance of women on boards in mitigating securities fraud lies in the mechanism of diversity. Second, we show that the market response to fraud from a more gender-diverse board is significantly less pronounced. Third, we show that women are more effective in mitigating both the presence and severity of fraud in male-dominated industries, which again supports the notion of diversity. All our findings are robust to controls for endogeneity and propensity score matching, among other robustness checks.

Keywords: corporate governance; ethical sensitivity; fraud; gender diversity; risk aversion

Suggested Citation

Cumming, Douglas J. and Leung, T.Y. and Rui, Oliver M. and Rui, Oliver M., Gender Diversity and Securities Fraud (July 24, 2014). Available at SSRN: or

Douglas J. Cumming (Contact Author)

Florida Atlantic University ( email )

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Boca Raton, FL 33431
United States


Birmingham Business School ( email )

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Birmingham, B15 2TY
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

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1000 Brussels

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T.Y. Leung

Hong Kong Shue Yan College ( email )

10 Wai Tsui Crescent
Braemar Hill Road
North Point
Hong Kong

Oliver M. Rui

China Europe International Business School (CEIBS) ( email )

699 Hong Feng Road
Shanghai 201206
86-21-28905618 (Phone)
86-21-28905620 (Fax)

HOME PAGE: http://

affiliation not provided to SSRN

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