Finance Department

 

Date of this Version

2005

Comments

Published in Journal of Corporate Finance 11 (2005), pp. 85–106; doi: 10.1016/j.jcorpfin.2003.12.001 Copyright © 2005 Elsevier B.V. Used by permission. http://www.elsevier.com/locate/econbase

Abstract

During the decade of the 1990s the number of women serving on corporate boards increased substantially. Over this decade, we show that the likelihood of a firm adding a woman to its board in a given year is negatively affected by the number of woman already on the board. The probability of adding a woman is materially increased when a female director departs the board. Adding a director, therefore, is clearly not gender neutral. Although we find that women tend to serve on better performing firms, we also document insignificant abnormal returns on the announcement of a woman added to the board. Rather than the demand for women directors being performance based, our results suggest corporations responding to either internal or external calls for diversity.

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