The Impact of Board Diversity on the Risk-taking of Listed Firms in Vietnam

Abstract

This study examines how board diversity impacts the risk-taking behavior of listed firms in Vietnam. Through panel data regression analysis, the findings reveal that both demographic and structural diversity within the Board of Directors play a significant role in shaping corporate risk-taking. Specifically, gender diversity and the age of board members are associated with higher risk, while diversity in board expertise, board size, and the presence of independent directors help lower risk tolerance and ensure financial stability. The results enrich the application of agency and resource dependence theories in the context of board diversity and risk-taking. They highlight the critical role of diverse governance structures in balancing risk and return, offering valuable insights for enhancing corporate governance in Vietnam. As companies and policymakers navigate these complexities, promoting diversity may be crucial for effectively managing corporate risk in emerging markets.