The impact of female leadership on the stock price crash risk of non-financial firms

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Abstract

Although the contribution of female leaders has changed significantly in recent years, pathways to achieving gender parity in leadership positions are still challenging. The paper examines the impact of executive gender and board gender diversity on stock price crash risk, using a regression method based on a sample of 148 Vietnamese non-financial firms over the period of 2013 to 2022. The results indicate that the presence of female chief executive officers (CEOs) or diverse genders on the board of directors (BOD) can reduce the risk of stock price crashes for non-financial enterprises. The study contributes to agency theory in the notion that female CEOs and female BOD members are often more risk-averse, and more adherent to regulations, business ethics, and financial reporting standards, thus reducing the possibility of hoarding bad news. Furthermore, the relationship between female CEOs, female members of BOD, and stock price crash risk is negative and more pronounced in firms with older female CEOs. However, large enterprises positively impact the risk of the stock price crash, regardless of the executive gender or board gender diversity. The findings contribute to the objective of gender parity and sustainable development of the stock exchange market in Vietnam and may also offer implications for other emerging markets.

Keywords: Female Leadership, Female CEO, Gender Diversity, Stock Price Crash Risk

Authors’ individual contribution: Conceptualization — T.T.P., T.M.N., and T.K.O.N.; Methodology — T.T.P., T.M.D.B., and P.M.U.N.; Software — T.M.D.B. and P.M.U.N.; Validation — T.M.D.B. and P.M.U.N.; Formal Analysis — T.M.D.B. and P.M.U.N.; Investigation — T.M.D.B., T.M.N., T.K.O.N., and P.M.U.N.; Resources — T.T.P.; Data Curation — T.T.P. and T.M.D.B.; Writing — Original Draft — T.M.D.B., T.M.N., T.K.O.N., and P.M.U.N.; Writing — Review & Editing — T.T.P., T.M.D.B., and P.M.U.N.; Supervision — T.T.P.; Project Administration — T.T.P.; Funding Acquisition — T.T.P.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G10, G14, G17, G18

Received: 05.09.2024
Revised: 17.12.2024; 24.03.2025
Accepted: 18.04.2025
Published online: 22.04.2025

How to cite this paper: Pham, T. T., Bui, T. M. D., Nguyen, T. M., Nguyen, T. K. O., & Nguyen, P. M. U. (2025). The impact of female leadership on the stock price crash risk of non-financial firms. Risk Governance and Control: Financial Markets & Institutions, 15(2), 31–42. https://doi.org/10.22495/rgcv15i2p3