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
Date Written: November 2, 2011
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: Suggested Citation