Female Directors: Why are Some Less Informed than Others?

66 Pages Posted: 6 Apr 2021

See all articles by Shawn Mobbs

Shawn Mobbs

University of Alabama - Culverhouse College of Business Administration

Yongxian Tan

Curtin University

Shage Zhang

Trinity University

Date Written: March 1, 2021


We find the limited supply of female directors, rather than gender differences or boardroom biases, can create an informational disadvantage for some female independent directors, as measured by their open market trading profits. The information disparity is largely isolated to firms with abnormally low representation by female directors. Female independent directors who are located further away from the company’s headquarters, have less industry experience or have shorter tenure exhibit the most limited information access. Accounting for these obstacles reduces the gender disparity in information. We further find that this information disparity among female independent directors contributes to the variation in their influence on board monitoring. More informed female independent directors are associated with fewer restatements, lower abnormal CEO compensation and higher Tobin’s Q. Our results have several policy implications.

Keywords: board gender diversity; female directors; information acquisition; insider trading; CEO compensation; restatements; firm value

JEL Classification: G30; G34; G38

Suggested Citation

Mobbs, Shawn and Tan, Yongxian and Zhang, Shage, Female Directors: Why are Some Less Informed than Others? (March 1, 2021). Journal of Corporate Finance (2021): 101938. https://doi.org/10.1016/j.jcorpfin.2021.101938, Available at SSRN: https://ssrn.com/abstract=3817370

Shawn Mobbs (Contact Author)

University of Alabama - Culverhouse College of Business Administration ( email )

101 Paul W. Bryant Dr.
Box 870382
Tuscaloosa, AL 35487
United States

Yongxian Tan

Curtin University ( email )

Kent Street
Perth, WA WA 6102

Shage Zhang

Trinity University ( email )

San Antonio, TX 78212
United States

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