Does Gender Matter in the Boardroom? Evidence from the Market Reaction to Mandatory New Director Announcements

55 Pages Posted: 2 Nov 2011 Last revised: 23 Jul 2012

Renee B. Adams

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

Stephen Gray

University of Queensland - Business School; Duke University - Fuqua School of Business; Financial Research Network (FIRN)

John Nowland

City University of Hong Kong

Date Written: November 2, 2011

Abstract

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.

Keywords: board of directors, director appointments, female directors, gender, monitoring, stakeholders

JEL Classification: J16, G30

Suggested Citation

Adams, Renee B. and Gray, Stephen and Nowland, John, Does Gender Matter in the Boardroom? Evidence from the Market Reaction to Mandatory New Director Announcements (November 2, 2011). Available at SSRN: https://ssrn.com/abstract=1953152 or http://dx.doi.org/10.2139/ssrn.1953152

Renée B. 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

Stephen Gray

University of Queensland - Business School ( email )

University of Queensland
Brisbane, Queensland 4072
Australia

Duke University - Fuqua School of Business

Box 90120
Durham, NC 27708-0120
United States

Financial Research Network (FIRN) ( email )

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

John Nowland

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong
China

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