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Women in the boardroom and their impact on governance and performance

By Renee B. Adams and Daniel Ferreira

Abstract

We show that female directors have a significant impact on board inputs and firm outcomes. In a sample of US firms, we find that female directors have better attendance records than male directors, male directors have fewer attendance problems the more gender-diverse the board is, and women are more likely to join monitoring committees. These results suggest that gender-diverse boards allocate more effort to monitoring. Accordingly, we find that chief executive officer turnover is more sensitive to stock performance and directors receive more equity-based compensation in firms with more gender-diverse boards. However, the average effect of gender diversity on firm performance is negative. This negative effect is driven by companies with fewer takeover defenses. Our results suggest that mandating gender quotas for directors can reduce firm value for well-governed firms

Topics: HD Industries. Land use. Labor
Publisher: Elsevier
Year: 2009
DOI identifier: 10.1016/j.jfineco.2008.10.007
OAI identifier: oai:eprints.lse.ac.uk:27808
Provided by: LSE Research Online
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