<![CDATA[This study examines the role of board diversity in risk managementand its impact on the quality of risk disclosure and the cost of capitalin financial institutions. Using a panel-based quantitative-empiricaldesign (2019–2025), this study develops two key constructs: a multidimensionalBoard Diversity Index (BDI) (demographic: gender,age, nationality; and functional: risk/audit/compliance expertise,IT/data security, risk committee, frequency of risk meetings) and aRisk Disclosure Quality Index (RISQ) that assesses substantivecontent (exposure specificity, limits and risk appetite, quantitativemetrics such as PD/LGD/VaR, scenarios/stress, and linkages tocapital and strategy). The impact on the cost of equity capital (COE)and the cost of debt (COD) is estimated using panel regression (firm& year fixed effects), mediation tests (bootstrap/SEM), and robusttests (alternative proxies, winsorizing, index redefinition). Theresults show that IKD has a positive effect on IKPR, mainly throughthe dimensions of functional expertise and strengthening boardprocesses (committees & risk agenda). Furthermore, IKPR isnegatively associated with COE and COD, indicating a decrease ininformation asymmetry and risk premium. The direct effect of IKDon the cost of capital is smaller than the mediation channel throughIKPR, confirming the mechanism: board diversity → increaseddisclosure quality → decreased cost of capital. Heterogeneityanalysis shows a stronger effect in high-risk environments,emphasizing the role of materiality. The research's primarycontribution is a risk-capability-oriented measure of board diversityand an assessment of the quality of auditable disclosures, beyondquantitative measures. Practical implications recommendstrengthening board composition (risk/audit/compliance, ITexpertise), institutionalizing risk committees and agendas, andfocusing on specific, measurable disclosures linked to capital andstrategy.]]>
