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Gender Diversity in Corporate Governance and Top Management

13 Pages Posted: 14 Jul 2008 Last revised: 16 Dec 2009

Claude Francoeur

HEC Montréal

Réal Labelle

HEC Montréal - Stephen A. Jarislowsky Chair in Governance

Bernard Sinclair-Desgagne

HEC Montréal; CIRANO; CIRPÉE; Ecole Polytechnique de Paris; London School of Economics & Political Science (LSE)

Date Written: July 13, 2008

Abstract

This article examines whether and how the participation of women in the firm's board of directors and senior management enhances financial performance. We use the Fama and French (1992, 1993) valuation framework to take the level of risk into consideration, when comparing firm performances, whereas previous studies used either raw stock returns or accounting ratios. Our results indicate that firms operating in complex environments do generate positive and significant abnormal returns when they have a high proportion of women officers. Although the participation of women as directors does not seem to make a difference in this regard, firms with a high proportion of women in both their management and governance systems generate enough value to keep up with normal stock-market returns. These findings tend to support the policies currently being discussed or implemented in some countries and organizations to foster the advancement of women in business.

Keywords: gender diversity, corporate governance

JEL Classification: G30, G34, J16

Suggested Citation

Francoeur, Claude and Labelle, Réal and Sinclair-Desgagne, Bernard, Gender Diversity in Corporate Governance and Top Management (July 13, 2008). Journal of Business Ethics, Vol. 81, 2008. Available at SSRN: https://ssrn.com/abstract=1159472

Claude Francoeur

HEC Montréal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal H3T 2A7, Quebec
Canada

Réal Labelle (Contact Author)

HEC Montréal - Stephen A. Jarislowsky Chair in Governance ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H3T 2A7
Canada
514 340 6374 (Phone)

Bernard Sinclair-Desgagne

HEC Montréal ( email )

3000, ch. de la Côte-Ste-Catherine
Montréal, Quebec H3T 2A7
Canada

CIRANO

1130 Sherbrooke Str, 14th floor
Montréal, Quebec
Canada

CIRPÉE

1130 Sherbrooke Str, 14th floor
Montréal, Quebec
Canada

Ecole Polytechnique de Paris

Ecole Polytechnique
Department of Economics
Paris, 75005
France

London School of Economics & Political Science (LSE)

Houghton Street
Department of Statistics
London, WC2A 2AE
United Kingdom

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