Gender Diversity Goals, Supply Constraints, and the Market for Seasoned Female Directors: The U.S. Evidence

57 Pages Posted: 22 Oct 2020

See all articles by Patricia Boyallian

Patricia Boyallian

Lancaster University - Department of Accounting and Finance

Sudipto Dasgupta

Chinese University of Hong Kong, ABFER, CEPR, and ECGI

Swarnodeep HomRoy

University of Groningen

Multiple version iconThere are 2 versions of this paper

Date Written: August 29, 2020

Abstract

We show that over the last decade, growing public pressure for board gender diversity and awareness of gender equality issues in the U.S. has manifested in “seasoned” female board members accumulating multiple board appointments at a rate faster than seasoned male directors. The larger firms have been the most active in attracting seasoned female directors, at the expense of the smaller firms. This has likely contributed to the smaller firms lagging behind the larger firms in the pursuit of more gender balance. Our evidence is highly consistent with “supply constraints”, as reflected in high costs of recruiting first-time female directors, which the larger firms manage to avoid and the smaller firms find too costly to incur. Gender quota mandates are likely to expose the smaller firms even more to these costs; however, the absence of mandates may also not be optimal. Given growing public pressure, it may be necessary to mandate that larger firms maintain the ratio of first-time to seasoned female appointments above some level.

Keywords: Board Gender Diversity, Gender Quota, Supply Constraints, Labor Market for Directors

JEL Classification: G34, J16, G38, J31

Suggested Citation

Boyallian, Patricia and Dasgupta, Sudipto and HomRoy, Swarnodeep, Gender Diversity Goals, Supply Constraints, and the Market for Seasoned Female Directors: The U.S. Evidence (August 29, 2020). Available at SSRN: https://ssrn.com/abstract=3688342 or http://dx.doi.org/10.2139/ssrn.3688342

Patricia Boyallian

Lancaster University - Department of Accounting and Finance ( email )

The Management School
Lancaster LA1 4YX
United Kingdom

Sudipto Dasgupta

Chinese University of Hong Kong, ABFER, CEPR, and ECGI ( email )

CUHK, Cheng Yu Tung Building, Room 1224
Shatin, NT
Hong Kong
Hong Kong

Swarnodeep HomRoy (Contact Author)

University of Groningen ( email )

Nettlebosje 2
Department of Economics, Econometrics and Finance
Groningen, Groningen 9747 AE
Netherlands

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