Board Tenure Diversity, Culture and Firm Risk: Cross-Country Evidence

Jiao Ji, Hongfeng Peng, Hanwen Sun, Haofeng Xu

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We examine the impact of board tenure diversity on firm risk in 37 countries. Using a difference-in-differences design facilitated by corporate board reforms across the world, we find that board tenure diversity leads to lower stock return volatility. This effect is more pronounced among firms with longer board tenures, which are more likely to result in board entrenchment and weak monitoring. The positive impact of board tenure diversity on reducing firm risk is weakened in more individualistic and higher power distance cultures, due to the balancing act between group independence and cohesiveness. Further tests suggest the lower risk levels are likely due to that tenure-diverse boards tend to adopt less risky investment policies.
Original languageEnglish
Article number101276
JournalJournal of International Financial Markets, Institutions and Money
Early online date24 Dec 2020
Publication statusPublished - 31 Jan 2021


  • Board tenure diversity
  • Firm risk
  • Culture
  • Power distance
  • Individualism

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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