Women in the Boardroom and Their Impact on Governance and Performance

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 allocatemore e¤ort to monitoring. Accordingly, we find that chief executive officer turnover is more sensitive to stock performance and directors receive more equity-based compensation in frms with more gender-diverse boards. However, the average e¤ect of gender diversity on firrm performance is negative. This negative e¤ect is driven by companies with fewer takeover defenses. Our results suggest that mandatinggender quotas for directors can reduce firm value for well-governed firms.

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