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Women in the Boardroom and Their Impact on Governance and Performance

45 Pages Posted: 26 Mar 2008 Last revised: 23 Jul 2012

Renee B. Adams

University of New South Wales, Department of Banking and Finance; ECGI; FIRN; ABFER

Daniel Ferreira

London School of Economics - Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Date Written: October 22, 2008

Abstract

We show that female directors have a significant impact on board inputs and firm outcomes. In a sample of US firms, we find that female directors have better attendance records than male directors, male directors have fewer attendance problems the more gender-diverse the board is, and women are more likely to join monitoring committees. These results suggest that gender-diverse boards allocate more effort to monitoring. Accordingly, we find that CEO turnover is more sensitive to stock performance and directors receive more equity-based compensation in firms with more gender-diverse boards. However, the average effect of gender diversity on firm performance is negative. This negative effect is driven by companies with fewer takeover defenses. Our results suggest that mandating gender quotas for directors can reduce firm value for well-governed firms.

Keywords: Board of Directors, Board Effectiveness, Gender, Diversity

JEL Classification: G12, G30, G34, J16, J33

Suggested Citation

Adams, Renee B. and Ferreira, Daniel, Women in the Boardroom and Their Impact on Governance and Performance (October 22, 2008). Available at SSRN: https://ssrn.com/abstract=1107721 or http://dx.doi.org/10.2139/ssrn.1107721

Renée Adams (Contact Author)

University of New South Wales, Department of Banking and Finance ( email )

Sydney, NSW 2052
Australia
+61(2)93854280 (Phone)

ECGI

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

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

FIRN

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

ABFER

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

Daniel Ferreira

London School of Economics - Department of Finance ( email )

Houghton Street
London, WC2A 2AE
United Kingdom
(+44) 20 7955 7544 (Phone)

HOME PAGE: http://personal.lse.ac.uk/FERREIRD/

European Corporate Governance Institute (ECGI)

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

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

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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