Boards and Managers Diversity; Impact on the Performance of Vietnamese Firms.

Sous la direction de MM. Christophe Moussu & Alain Chevalier (ESCP Business School)

The board of directors is the heart of a firm’s governance mechanism and thus attracts vast attention from both practitioners and researchers. As the board is composed of individuals who carry various functions and personal values, a large stream of research focuses on how a firm constructs its board to well represent and secure the shareholders’ interests. This thesis complements the existing literature by studying the linkage between board composition on corporate performance and behaviors using a sample of listed firms in Vietnam, a typical emerging country. In the first paper, we investigate the impact of board heterogeneity on firm performance proxied by Tobin’s Q. We construct a multidimensional heterogeneity index based on the nine personal attributes of board directors.

The baseline test shows that firm performance increases with board heterogeneity. Our supplemental analysis demonstrates that the effect of board heterogeneity on performance is mitigated by the levels of firm risk, complexity, and political corruption. We also document that the benefit of heterogenous directors is lower for state-owned firms and the positive effect of board heterogeneity on firm performance is weakened with the presence of an influential director, who is likely to manipulate other directors’ contributions. In the second paper, we examine the impact of board interlocks, as a conduit of information, on corporate risk-taking behavior. Using network centrality measurement as proxies for the quality and quantity of the network created by joint directors, we observe that firms’ connectedness mitigates risk-taking behaviors. We subsequently find that information from interlocking directors is more important for firms with limited access to both internal and external information sources. Further analysis on direct interlocks shows that more intra-industry interlocks, which provide relevant information, significantly mitigate firm risk-taking.

At last, we show that the negative relation between board 9 interlocks and corporate risk-taking is more substantial among firms operating in higher corrupt provinces, with higher market competition, lower state ownership, and higher foreign-owned and male CEO. In the third paper, we expand our interest to the top management team by investigating the impact of CEO gender on the stock price crash risk of Vietnamese listed firms. We document that female CEO negatively impact stock price crash risk, while our extended examination suggests no evidence of the effect of female CFOs on crash risk. Our findings support the notion that CEOs play a more substantial role than CFOs in financial policy decisions, contradicting similar research in the developed market. In addition, we observe that the inverse relationship between female CEOs and stock price crash risk is more pronounced in situations where stock price crash risk is likely initiated, particularly in sub-samples with higher business risk, higher foreign ownership, lower control government ownership, and higher political corruption.


Keywords: Board of directors, corporate governance, diversity, performance, risk, emerging countries.