Winds of Change: Gender Quota on Boards in the Face of Patriarchy

74 Pages Posted: 25 Feb 2021 Last revised: 22 Feb 2022

See all articles by S Lakshmi Naaraayanan

S Lakshmi Naaraayanan

London Business School

Kasper Meisner Nielsen

Copenhagen Business School - Department of Finance

Date Written: May 28, 2020

Abstract

We study the introduction of gender quotas in India, the first country with strong patriarchal views to mandate female directors on corporate boards. Despite small penalties, we find high compliance rates, resulting in a threefold expansion of the female director labor pool. After the reform, almost half of the firms appoint and retain female directors beyond the ambit of the quota, a change that is significantly weaker on boards with stronger patriarchal views. The better opportunities for females manifest in a higher likelihood of appointment on important subcommittees and in a reduction in the gender gap in director remuneration from 30% to 3%. Our results suggest that although gender quotas deepen and diversify the director pool, strong patriarchal views among incumbent directors hinder the transition to gender-diverse boards.

Keywords: Gender quota, Female directors, Board composition, Director quality

JEL Classification: G30 ; G34 ; J33 ; O16

Suggested Citation

Naaraayanan, S Lakshmi and Nielsen, Kasper Meisner, Winds of Change: Gender Quota on Boards in the Face of Patriarchy (May 28, 2020). Available at SSRN: https://ssrn.com/abstract=3751111 or http://dx.doi.org/10.2139/ssrn.3751111

S Lakshmi Naaraayanan (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London NW1 4SA
United Kingdom

HOME PAGE: http://www.lakshmin.com

Kasper Meisner Nielsen

Copenhagen Business School - Department of Finance ( email )

A4.17 Solbjerg Plads 3
Copenhagen, Frederiksberg 2000
Denmark

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