This paper investigates whether gender-diverse executive teams and corporate boards increase the financial stability of a company as female executives tend to be more risk-averse, choose more conservative financing decisions by using less risky investment choices, and have a higher chance of survival compared to companies with their male counterparts. Based on agency theory, the risk profile differs between the agent (board member) and the principal (owner of a company), as the manager tends to make riskier investment choices to maximise his own interest over the company's value. Furthermore, financing decisions, such as working capital strategies, impact the financial stability of a corporation but depend on the risk appetite of the decision-maker.

This research finds a strong relationship between executive member diversity and working capital. More specifically, I find increasing female executive officers positively impacts working capital management, using fixed- and random-effects panel regression models. However, the evidence that more women on corporate boards significantly impact working capital management is not confirmed. Based on the research findings, it appears that female executives, given their managerial responsibilities, have a stronger influence
on working capital management. Accordingly, the strategy of having more female board members could be simply an act of investor signalling mechanism (Abdullah, Ismail and Nachum, 2016; Ararat, Alkan and Aytekin, 2016).

In the context of this study, agency theory helps to analyse the principal-agent conflict between executive officers, corporate boards, and the long-term financial stability of a corporation. According to agency theory, executive officers and corporate boards want to maximise their short-term compensation while corporate owners and shareholders are more interested in the company's
long-term financial stability.