Mandating Women on Boards: Evidence from the United States
77 Pages Posted: 17 Oct 2018 Last revised: 22 Dec 2020
Date Written: October 13, 2018
On September 30, 2018, California became the first U.S. state to set quotas for women directors on corporate boards. The law resulted in a decline in shareholder value for firms headquartered in California. This decline increases with the number of female directors required to be added under these quotas. We find evidence that supply-side constraints drive the announcement effects. The law expanded the supply of women in the director pool. Female directors appointed to meet the quotas are as skilled as male directors, but possess a less similar set of skills and are given fewer responsibilities on the board.
Keywords: board of directors, gender diversity, female directors, quotas
JEL Classification: G3, K2, J2, J7
Suggested Citation: Suggested Citation