Gender Diversity on Corporate Boards: Do Women Contribute Unique Skills?

2016/05/01 by Daehyun Kim, Dae Hyun Kim, Laura T. Starks · 10 citations
Social Sciences · Business, Management and Accounting · #Gender Diversity and Inequality #Corporate Finance and Governance #Gender Politics and Representation

paper · doi:10.1257/aer.p20161032

Abstract

We show that gender diversity in corporate boards could improve firm value because of the contributions that women make to the board. Prior studies examine valuation effects of gender-diverse boards and reach mixed conclusions. To help resolve this conundrum, we consider how gender diversity could affect firm value, that is, what mechanisms could explain how female directors benefit corporate board performance. We hypothesize and provide evidence that women directors contribute to boards by offering specific functional expertise, often missing from corporate boards. The additional expertise increases board heterogeneity which Kim and Starks (2015) show can increase firm value.

Cited by

• Female directors, board committees and firm performance
• Effect of gender composition of committees
• Where Women Make a Difference: Gender Quotas and Firms’ Performance in Three European Countries
• Women Quotas vs. Men Quotas in Academia: Students Perceive Favoring Women as Less Fair Than Favoring Men. [europepmc]
• Editorial: Women and Entrepreneurship. [europepmc]
• The market reaction to syndicated loan announcements before and during the COVID-19 pandemic and the role of corporate governance. [europepmc]
• Board Gender Diversity, Corporate Social Responsibility Disclosure, and Firm's Green Innovation Performance: Evidence From China. [europepmc]
• The effect of shareholder litigation rights on female board representation: A quasi-natural experiment. [europepmc]
• Are female directors more employee-friendly? Board gender diversity and employee benefits: evidence from China. [europepmc]
• Does gender diversity mediate the relationships of diversity beliefs and workplace happiness? [europepmc]

Related

• Gender Diversity and Board Performance: Women's Experiences and Perspectives
• How Does the Stock Market Value Female Directors? International Evidence
• Diversity begets diversity? The effects of board composition on the appointment and success of women CEOs
• Do women leaders promote positive change? Analyzing the effect of gender on business practices and diversity initiatives
• Gender gaps at the top: Does board composition affect executive compensation?