Female CEOs’ risk management and earnings performance during the financial crisis

This study examines whether chief executive officers’ (CEOs’) risk-related motives affect women’s risk management and firm profitability. We find that risk management and profitability are positively related for the full sample period, but the significance of this relationship weakens during the 2007–2009 financial crisis period. During this crisis, female CEOs have a significant positive relationship with the quality of internal control but a negative correlation with profitability. Risk-taking motives such as company-related wealth and CEO duality weaken the significance of this relationship, suggesting that such motives can lower women’s risk management ability during the crisis. Meanwhile, a risk-averse motive such as high stock ownership supports the significance of this relationship. Interestingly, the risk-averse motive itself does not affect CEOs’ risk management, indicating that female CEOs’ risk management ability may not result from their tendency to avoid risks.