Does Gender Matter in the Boardroom? Evidence from the Market Reaction to Mandatory New Director Announcements
Renee B. Adams
University of New South Wales; Financial Research Network (FIRN); European Corporate Governance Institute (ECGI)
University of Queensland - Business School; Duke University - Fuqua School of Business; Financial Research Network (FIRN)
City University of Hong Kong
November 2, 2011
Around the world, policy makers are mandating gender quotas for boards of publicly-traded firms. Since the benefits and costs of these quotas accrue to shareholders, it is important to see how they react to the appointment of female directors. Using data on mandatory announcements of new director appointments, we find that the gender of directors appears to be value-relevant. On average, shareholders value additions of female directors more than they value additions of male directors. Firms with workplace practices in place to promote workplace equality appear to benefit the most from boardroom gender diversity. This suggests that appointing female directors may help resolve value-decreasing stakeholder conflicts.
Number of Pages in PDF File: 55
Keywords: board of directors, director appointments, female directors, gender, monitoring, stakeholders
JEL Classification: J16, G30
Date posted: November 2, 2011 ; Last revised: July 23, 2012
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