Does Board Gender Diversity Have a Financial Impact? Evidence Using Stock Portfolio Performance
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There is growing regulatory pressure on firms worldwide to address the under-representation of women in senior positions. Regulators have taken a variety of approaches to the issue. We investigate a jurisdiction that has issued recommendations and disclosure requirements, rather than implementing quotas. Much of the rhetoric surrounding gender diversity centres on whether diversity has a financial impact. In this paper we take an aggregate (market-level) approach and compare the performance of portfolios of firms with gender diverse boards to those without. We also investigate whether having multiple women on the board is linked to performance, and if there is a within-industry effect. Overall, we do not find evidence of an association between diversity and performance. We find some weak evidence of a negative correlation between having multiple women on the board and performance, but that in some industries diversity is positively correlated with performance.
KeywordsGender diversity Corporate governance Financial performance
The authors thank John Nowland, Emma Schultz, Tom Smith, Garry Twite and workshop participants at the Australian National University for helpful comments. We also thank Chen Cheng and Theingi Oo for research assistance. We thank Susan McCreery for proofreading the manuscript. We acknowledge the Accounting and Finance Association of Australia and New Zealand for financial support.
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