News / Asia

Q&A with Douglas Cumming: Gender and Fraud in China

Frances Alonzo
The push for more women on company boards is getting a boost from the results of a new study. Research shows firms that have a higher proportion of female directors on their board commit less fraud in China. 
 
A research study by CEIBS Professor of Finance and Accounting Oliver Rui and his co-authors, Douglas Cumming of York University Schulich School of Business and Tak Yan Leung from Open University of Hong Kong, examined the impact of gender difference on corporate fraud in China.  
 
Douglas Cumming tells VOA's Frances Alonzo what conclusions can be made from the study.
 
CUMMING: We examine gender diversity on boards of directors amongst companies based in China. We discovered that companies that have more gender diverse boards with up to 50% women on the board, are less likely to be involved in securities fraud. We also discovered that the market reaction to fraud from a gender diverse board is less severe. And we show that the impact of women on the board is more pronounced in industries that are traditionally dominated by males.
 
ALONZO: So why is that?
 
CUMMING: There’s two competing predictions. One is that women are more ethically sensitive than men are and a second idea is that diversity itself gives rise to lower likelihood of “group think,” if you will, and better governance and as a result, less fraud. And our data are consistent with the latter view that diversity mechanism appears to be the one that’s driving the reduction in fraud associated with a more diverse board.
 
ALONZO: How should companies, global companies, view this report? What should they take away?
 
CUMMING: Our study doesn’t look at the average performance levels, we are more concerned with mitigating the bad actors, so to speak. And as a result, the practical implications are that, a good thing, for at least in terms of a public policy lesson is that having a more diverse board can help governance, better protect investors, and improve companies and their listings.
 
ALONZO: So now what about in boardrooms, do you think they will be opening the doors wide so that they can let more women on the board?
 
CUMMING: From what we see in the data, I think that it’s unambiguously a good thing with respect to mitigating fraud. Diversity on boards is something that we think is important, has been understudied  and perhaps hasn’t had enough attention  in the business world and amongst regulators and policy makers. This type of evidence can be used to support women’s presence in the boardroom and encourage companies to have greater gender diversity on the board. Those are good results in promoting those issues, that’s for sure.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Video Secret Service Chief Under Fire for White House Security Breach

Julia Pierson faces tough questions from lawmakers after recent intrusion at White House, says: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid