The Big Three and Board Gender Diversity: The Effectiveness of Shareholder Voice

69 Pages Posted: 21 Nov 2022 Last revised: 31 Jan 2023

See all articles by Todd A. Gormley

Todd A. Gormley

Washington University in St. Louis; European Corporate Governance Institute (ECGI)

Vishal K. Gupta

University of Alabama - Department of Management

David A. Matsa

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER)

Sandra Mortal

University of Alabama - Culverhouse College of Commerce & Business Administration

Lukai Yang

Texas A&M International University

Multiple version iconThere are 2 versions of this paper

Date Written: November 2022

Abstract

In 2017, “The Big Three” institutional investors launched campaigns to increase gender diversity on corporate boards. We estimate that their campaigns led American corporations to add at least 2.5 times as many female directors in 2019 as they had in 2016. Firms increased diversity by identifying candidates beyond managers’ existing networks and by placing less emphasis on candidates’ executive experience. Firms also promoted more female directors to key board positions, indicating firms’ responses went beyond tokenism. Our results highlight index investors’ ability to effectuate broad-based governance changes and the important impact of investor buy-in in increasing corporate-leadership diversity.

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Suggested Citation

Gormley, Todd A. and Gupta, Vishal K. and Matsa, David A. and Mortal, Sandra and Yang, Lukai, The Big Three and Board Gender Diversity: The Effectiveness of Shareholder Voice (November 2022). NBER Working Paper No. w30657, Available at SSRN: https://ssrn.com/abstract=4282507 or http://dx.doi.org/10.2139/ssrn.4282507

Todd A. Gormley (Contact Author)

Washington University in St. Louis ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Vishal K. Gupta

University of Alabama - Department of Management ( email )

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David A. Matsa

Northwestern University - Kellogg School of Management ( email )

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National Bureau of Economic Research (NBER) ( email )

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Sandra Mortal

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

Culverhouse College of Business
Tuscaloosa, AL 35487-0223
United States

Lukai Yang

Texas A&M International University ( email )

Laredo, TX 78041
United States

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