Gender Diversity and Securities Fraud

Academy of Management Journal, Forthcoming

46 Pages Posted: 11 Feb 2015 Last revised: 13 Feb 2015

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

Tak Yan Leung

City University of Hong Kong (CityUHK) - Department of Accountancy

Oliver M. Rui

China Europe International Business School (CEIBS)

Multiple version iconThere are 3 versions of this paper

Date Written: February 2, 2015

Abstract

We formulate theory on the effect of board of director gender diversity on the broad spectrum of securities fraud and generate three main insights. First, based on ethicality, risk aversion, and diversity, we hypothesize that gender diversity on boards can operate as a significant moderator for the frequency of fraud. Second, we hypothesize that the stock market response to fraud from a more gender-diverse board is significantly less pronounced. Third, we hypothesize that women are more effective in male-dominated industries in reducing both the frequency and severity of fraud. Our first-ever empirical tests, based on data from a large sample of Chinese firms that committed securities fraud, are largely consistent with each of these hypotheses.

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

JEL Classification: G3, J16, K22

Suggested Citation

Cumming, Douglas J. and Leung, Tak Yan and Rui, Oliver M., Gender Diversity and Securities Fraud (February 2, 2015). Academy of Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2562399

Douglas J. Cumming (Contact Author)

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

Tak Yan Leung

City University of Hong Kong (CityUHK) - Department of Accountancy ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong
China

Oliver M. Rui

China Europe International Business School (CEIBS) ( email )

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

Register to save articles to
your library

Register

Paper statistics

Downloads
236
Abstract Views
2,665
rank
26,436
PlumX Metrics