Board Gender-Balancing and Firm Value

62 Pages Posted: 14 Mar 2016 Last revised: 14 Nov 2019

See all articles by B. Espen Eckbo

B. Espen Eckbo

Tuck School of Business at Dartmouth; European Corporate Governance Institute (ECGI)

Knut Nygaard

Oslo Business School at Oslo and Akershus University College of Applied Sciences (HiOA)

Karin S. Thorburn

Norwegian School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: November 8, 2019

Abstract

Prior studies of Norway's 2003 pioneering board gender-quota law conclude that it imposed statistically and economically large costs on shareholders of firms listed on Oslo Stock Exchange. We show that this dramatic conclusion does not survive simple but necessary econometric adjustments, whether applied to prior data sets or our larger data panel. Notwithstanding substantial statistical power, our estimates fail to reject the hypothesis of a zero impact of the quota on equity values (announcement returns, long-run portfolio returns, Tobin's Q) and long-run operating profitability. Also important, we document that boards' CEO experience from large firms - the most important type of director CEO experience - did not decline. Finally, there is little evidence that the quota itself caused legal conversion. Overall, our new evidence suggests that the pool of qualified female directors was sufficiently deep to avoid significant shareholder-borne costs of the quota.

Keywords: Gender quota, director independence, valuation effect, long-run performance, corporate conversion, busy directors, director network power

JEL Classification: G38

Suggested Citation

Eckbo, B. Espen and Nygaard, Knut and Thorburn, Karin S., Board Gender-Balancing and Firm Value (November 8, 2019). European Corporate Governance Institute (ECGI) - Finance Working Paper No. 463/2016; Tuck School of Business Working Paper No. 2746786. Available at SSRN: https://ssrn.com/abstract=2746786 or http://dx.doi.org/10.2139/ssrn.2746786

B. Espen Eckbo (Contact Author)

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States
603-646-3953 (Phone)
603-646-3805 (Fax)

HOME PAGE: http://www.tuck.dartmouth.edu/eckbo

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Knut Nygaard

Oslo Business School at Oslo and Akershus University College of Applied Sciences (HiOA) ( email )

Pilestredet 35
Oslo, 0167
Norway

Karin S. Thorburn

Norwegian School of Economics ( email )

Helleveien 30
N-5045 Bergen
Norway
+4755959283 (Phone)

HOME PAGE: http://www.nhh.no/cv/thorburn

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

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