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Why female board representation matters The role of female directors in reducing male CEO overconfidence

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dc.contributor.authorGoergen, Marc
dc.contributor.authorChen, Jie
dc.contributor.authorSau Leung, Woon
dc.contributor.authorSong, Wei
dc.contributor.rorhttps://ror.org/02jjdwm75
dc.date.accessioned2025-03-18T16:23:51Z
dc.date.available2025-03-18T16:23:51Z
dc.date.issued2019-09
dc.description.abstractWe suggest a novel reason why there might be a need for female board representation. Female participation in the boardroom attenuates the CEO’s overconfident views about his firm’s prospects as we find that male CEOs at firms with female directors are less likely to hold deepin-the-money options. Further, we argue that female board representation matters for industries where male CEO overconfidence is more prevalent. We find support for our argument as female directors are associated with less aggressive investment policies, better acquisition decisions, and improved financial performance for firms operating in industries with high overconfidence prevalence. We also identify a market failure around economic crises. Firms that do not have (sufficient) female board representation suffer a greater drop in performance as a result of the crisis than those that have female board representation.
dc.description.peerreviewedyes
dc.description.statusPublished
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dc.identifier.citationChen, J., Leung, W. S., Song, W., & Goergen, M. (2019). Why female board representation matters: The role of female directors in reducing male CEO overconfidence. Journal of Empirical Finance, 53, 70-90. https://doi.org/10.1016/j.jempfin.2019.06.002.
dc.identifier.doihttps://doi.org/10.1016/j.jempfin.2019.06.002
dc.identifier.issn0927-5398
dc.identifier.urihttps://hdl.handle.net/20.500.14417/3656
dc.journal.titleJournal of Empirical Finance
dc.language.isoen
dc.page.final90
dc.page.initial70
dc.page.total69
dc.publisherScience Direct
dc.relation.departmentFinance
dc.relation.entityIE University
dc.relation.schoolIE Business School
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International
dc.rights.accessRightsinfo:eu-repo/semantics/openAccess
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/deed.en
dc.subject.keywordFemale board representation
dc.subject.keywordCEO overconfidence
dc.subject.keywordInvestment
dc.subject.keywordFirm performance
dc.titleWhy female board representation matters The role of female directors in reducing male CEO overconfidence
dc.typeinfo:eu-repo/semantics/article
dc.version.typeinfo:eu-repo/semantics/acceptedVersion
dc.volume.number53
dspace.entity.typePublication
relation.isAuthorOfPublication55eb0faa-13da-4a35-a432-f529b62f4d8b
relation.isAuthorOfPublication.latestForDiscovery55eb0faa-13da-4a35-a432-f529b62f4d8b
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