Finance Department


Date of this Version



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.


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.