Does Board Gender Diversity Matter?

34 Pages Posted: 24 Jun 2020

See all articles by Sunil S. Poshakwale

Sunil S. Poshakwale

Cranfield University - School of Management

Vineet Agarwal

Cranfield University - School of Management

Date Written: June 1, 2020

Abstract

We analyze the relationship between the proportion of women directors on the boards of UK listed firms and their financial performance and risk. We find that firms with greater gender diversity are more profitable and enjoy higher market valuations. However, consistent with prior research, we do not find any reliable evidence to suggest that gender diversity affects stock returns or risk. Our findings make two important contributions to the literature. First, we show that greater representation of women on boards is not merely an issue about social inclusion but it is economically beneficial. Second, the UK’s approach of using voluntary targets to increase the board gender diversity seems to be effective.

Keywords: Gender diversity, Corporate Governance, Market Efficiency, Board Size, Board Diversity

JEL Classification: G14, G32

Suggested Citation

Poshakwale, Sunil S. and Agarwal, Vineet, Does Board Gender Diversity Matter? (June 1, 2020). Available at SSRN: https://ssrn.com/abstract=3615993 or http://dx.doi.org/10.2139/ssrn.3615993

Sunil S. Poshakwale (Contact Author)

Cranfield University - School of Management ( email )

Bedfordshire, MK43 0AL
United Kingdom

Vineet Agarwal

Cranfield University - School of Management ( email )

Bedfordshire, MK43 0AL
United Kingdom
00 44 (0) 1234 754543 (Phone)
00 44 (0) 1234 752554 (Fax)

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