AAA Spark Meeting of Regions

The Effect of Female Board Directors on Insider Trading Activity

• In Event: CSR Reporting, Board Diversity and Insider Trading

Abstract

Based on female directors' morality and risk aversion traits, this study expects to provide empirical evidence on female board gender diversity's effect on insider trading activity. The study anticipates that female representation on a company’s board has a negative and statistically significant impact on insider trading activity. More specifically, the study seeks to provide evidence that firms governed by a large proportion of female directors are less likely to engage in insider trading than firms governed by a small proportion of female directors. The main finding is consistent with the notion of the risk aversion and moral arguments of female directors. The main result is expected to be robust to alternative model specifications, selection bias, reverse causality, omitted variable bias, and measurement errors.

Author

• RIZVANA ZAMEERUDDIN, University of Wisconsin-Whitewater