Gender Diversity in the Boardroom and Firm Financial Performance



Campbell K & Minguez-Vera A (2008) Gender Diversity in the Boardroom and Firm Financial Performance. Journal of Business Ethics, 83 (3), pp. 435-451.

The monitoring role performed by the board of directors is an important corporate governance control mechanism, especially in countries where external mechanisms are less well developed. The gender composition of the board can affect the quality of this monitoring role and thus the financial performance of the firm. This is part of the “business case� for female participation on boards, though arguments may also be framed in terms of ethical considerations. While the issue of board gender diversity has attracted growing research interest in recent years, most empirical results are based on U.S. data. This article adds to a growing number of non-U.S. studies by investigating the link between the gender diversity of the board and firm financial performance in Spain, a country which historically has had minimal female participation in the workforce, but which has now introduced legislation to improve equality of opportunities. We investigate the topic using panel data analysis and find that gender diversity – as measured by the percentage of women on the board and by the Blau and Shannon indices – has a positive effect on firm value and that the opposite causal relationship is not significant. Our study suggests that investors in Spain do not penalise firms which increase their female board membership and that greater gender diversity may generate economic gains. ABSTRACT FROM AUTHORCopyright of Journal of Business Ethics is the property of Springer Science & Business Media B.V. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

3; ABSTRACTS; Accounting; ACCURACY; Affect; analysis; ARGUMENT; board of directors; BOARDS of directors; BUSINESS; composition; Control; Copyright; CORPORATE governance; Countries; data; DATA analysis; diversity; DIVERSITY in the workplace; Economic; email; empirical; endogeneity; Equality; ETHICS; EXECUTIVES; Female; FINANCE; financial; FINANCIAL performance; firm; firm value; firms; Gender; graph; interest; INVESTIGATE; Legislation; MECHANISM; MECHANISMS; media; Membership; Monitoring; NUMBER; participation; Performance; properties; QUALITY; relationship; Research; Role; Science; SITES; Spain; Stirling; TERMS; universities; VALUE; Women; WOMEN executives

Journal of Business Ethics: Volume 83, Issue 3

Publication date31/12/2008

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Dr Kevin Campbell

Dr Kevin Campbell

Senior Lecturer in Finance, Accounting & Finance