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

    Syrian Torture Victim Recounts Horrors

    'You make them think you have surrendered' says Jalal Nofal, a doctor who was jailed and survived repeated interrogations in Syria

    Mandela’s Millions Paid to Heirs, But Who Gets His Country Home?

    Saga around $3 million estate of country's first democratic president is far from over as Winnie Mandela’s fight for home overshadows payouts

    Guess Which Beach is 'Best in the US'?

    Hawaii’s Hanauma Bay tops an annual "top 10" list compiled by a coastal scientist, also known as Doctor Beach

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora