Additions to Corporate Boards: Does Gender Matter?

Abstract

This paper examines the determinants of a firm adding a woman to its board of directors. Using panel data for a sample of large publicly held firms for the years 1990-1999, we find that the probability of adding a woman to a board in a given year is inversely related to the number of woman directors already on the board. Further the probability of adding a woman is substantially increased whenever a woman departs the board relative to the departure of a male outside director. Clearly then, gender is a factor in board hiring decisions. The evidence is mixed, however, as to whether gender became less of a decision factor in the latter part of the decade of the nineties. Lastly, the results suggest that the overall increase in female board representation during the past decade was due to a greater demand for diversity, rather than simply an increase in the pool of qualified female board candidates.

Keywords: board of directors, director turnover, gender, diversity

JEL Classification: G30, G34, J16