How Deep is the Labor Market for Female Directors? Evidence from Mandated Director Appointments

68 Pages Posted: 18 Oct 2021 Last revised: 28 Feb 2023

See all articles by Daniel Greene

Daniel Greene

Clemson University

Vincent Intintoli

Clemson University, Department of Finance

Kathleen M. Kahle

University of Arizona - Department of Finance; European Corporate Governance Institute (ECGI)

Date Written: February 27, 2023

Abstract

We examine the depth of the labor market for female directors following an exogenous shock to demand caused by California Senate Bill 826 (SB 826). Despite a surge in female appointments to California firms, director qualifications remain stable when benchmarked to (1) new male directors appointed to California firm boards and (2) new female directors appointed to non-California firm boards over the same period. We likewise find that announcement returns to new female director appointments post-SB 826 are similar to those of control groups, indicating that the market does not view appointments of female California directors more negatively following the law. These results hold for both voluntary and mandated female director appointments. Generalizability tests suggest that if faced with a similar demand shock, other U.S. states should have a sufficient supply of female director candidates to increase female representation on boards without harming director quality.

Keywords: Boards of directors, Gender diversity, Regulation, Labor Market

JEL Classification: G3, G34, G38, K2, K22, J2, J7

Suggested Citation

Greene, Daniel and Intintoli, Vincent and Kahle, Kathleen M., How Deep is the Labor Market for Female Directors? Evidence from Mandated Director Appointments (February 27, 2023). Available at SSRN: https://ssrn.com/abstract=3943718 or http://dx.doi.org/10.2139/ssrn.3943718

Daniel Greene

Clemson University ( email )

101 Sikes Ave
Clemson, SC 29634
United States

Vincent Intintoli

Clemson University, Department of Finance ( email )

Clemson, SC 29634
United States
864-656-2263 (Phone)

Kathleen M. Kahle (Contact Author)

University of Arizona - Department of Finance ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States
520-621-7489 (Phone)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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