Board gender diversity, efficiency and risk-taking behavior: Empirical evidence from insurance firms in Kenya

Gender diversity in the board has recently become the most intensely deliberated and scrutinized corporate governance aspect, especially its linkage with various corporate economic outcomes following numerous corporate scandals as a results of weak governance mechanisms. This empirical work examined association between board gender diversity (BGD), efficiency and risk-taking behavior (RTB) of insurers in Kenya over 8 year's period from 2013 to 2020 using a dynamic data analysis model on a Kenyan sample of 53 insurers. The findings confirm a significant inverse association between BGD and RTB. The study also reports an insignificant negative association with risk taking, despite showing that generally insurers are technically inefficient. The study, therefore, suggests that boards with relatively higher proportions of women have lower propensity for risk taking. The outcomes have implications for the shareholders on the potential benefits of women on board in reducing propensity for risk taking among insurers. With regard to regulatory and policy implications, the findings support the argument for policy formulation and regulations on gender quotas in both public and private insurance firms. This is particularly valuable in emerging countries where corporate governance is at nascent stage. The study recommends that future studies could extend the scope to determine the optimal gender mix as well as broaden the studies to cover gender inclusivity among the top executives and embrace additional BGD variables.