Gender diversity= Number of women in board divided by the number of directors in board (Boar size)

Hi,

Yes the percentage of Women in the board is important, especially if they are independent directors, but it would be also advisable to know if they are involved in a committee (audit, nomination, compensation,...) or more than one committee. It would be still be useful to know their skills (international experience, lawyer, finance,...) to assess their importance in the board.

You may have a look to these papers:

K Rao, C Tilt, "Board composition and CSR: The role of diversity, gender, strategy and decision making", Journal of Business Ethics, 2016, Vol 138, p 327 -347.

B Fryins, O Dodd, H Cimerova, "The impact of cultural diversity in corporate boards on firm performance", Journal of Corporate finance, 2016 forthcoming

Best regards

Percentage (composition) of women as compared to the total board members. This is an important and valid issue. Whether the existence (as well as the magnitude) of women on board would drive towards good governance. Good luck.

maybe you could do a longitudinal study over a period of time to check how the gender dynamics have changed over time?

Or a latitudinal study comprising of various companies over the same period of time?

Relate this to efficiency of the business decisions made during that period?

Size of the firms also play a significant role as regard gender diversity whether it is large or small firms. Net revenue and market cap are two control variables by which firm size is measured. Gender diversity is relative to the sum of board members (board size), board size is also used as an explanatory  variable

The following papers may be of benefit:

1. Bernardi R. Threadgill V. (2010). Women directors and cooperate social responsibilty. Electronic journal of Business Ethics and Organisational studies 15(2) pp 15-21

2. McCann M. and Wheeler S. (2011). Gender diversity in the FTSE 100: The Business case claim explored. Journal of Law and Society 38(4) pp 542-574 

thank you all

The simple solution is ''Equal opportunities,''

I agree with the relevance of the following information:

- composition of the board by gender

- percentage of women among  independent directors

- presence of women in different committees (Audit and Risk Control, Remuneration, Nomination)

- professional background by gender in the board and in the committee

Gender diversity is not a percentage. What if a board is  90% men ? Sorry to give one of my papers as an example but I think it may be useful to see the references.

http://onlinelibrary.wiley.com/doi/10.1111/corg.12103/abstract

The measurement of gender diversity as a proportion of board membership is straightforward but the significance of such a number is not.  Three groups – male, female and transgender but what difference is it going to make?

Some studies, including several of my own, have postulated that diversity affects financial performance (Tobin’s Q, TOA etc.) and in NGOs and microfinance we suggested in impacts upon other outputs such as breadth and depth of services.

Three problems arise.  First when starting from a low gender diversity threshold adding one woman or one transgender is a big change although the proportion is small.  Is it a linear relationship or something different in terms of the impact that might be expected?  Second, is to be expected that the impact of gender diversity will have size, industry and other effects associated with it.  As an example, we found that more profitable companies, which were well established had more women on the board.  The issue of causality is a problem in this context.  The third issue is whether it is the gender or attributes of the person that make a difference.  Experience, age, networks, professional affiliations may be what is important in terms of performance and potentially a woman might bring something different to the board other than gender.  Is gender just an “instrumental variable” for other things?

My suggestion is refine the question in terms of the impact measure, dependent variable, and then devise testable hypotheses.  As a final note when using panel data with gender as a variable there is often little variability (Chow Test), suggesting the panel is no better than a cross-sectional analysis.  In this case testing for changes in diversity, a bit like event or announcement effect studies, using a difference in difference approach has for us proved fruitful.  

Enjoy!  It is an importance issue for research and for teachers, succession planning, policy making etc.

For for variation, in terms of ethnicity of the board, Blau index could be used.

Hi,

You find ideas in this paper:

The impact of board gender composition on dividend payouts

Journal of Corporate Finance  April 2017, Pages 86-105

Jie Chen, Woon Sau Leung, Marc Goergen

Best regards

These articles could be interesting for your study.

Adams, R., & Ferreira D. (2009). Women on the boardroom and their impact on governance and performance. Journal of Financial Economics, 94, 291-309.

Adams, R., & Funk, P. (2012). Beyond the glass ceiling: does gender matter? Management Science, 58, 219–235.

Adams, R., Gray, S., & Nowland, J. (2011). Does Gender Matter on the boardroom? Evidence from the Market Reaction to Mandatory New Director Announcement. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1953152.

Ahern, K.R., & Dittmar, A.K. (2012). The Changing of the Boards: The Impact on Firm Valuation of Mandated Female Board Representation. The Quarterly Journal of Economics, 127, 137-197.

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

Faccio, M., Marchica, M-T, and Mura, R. (2016). CEO gender, corporate risk-taking, and the efficiency of capital allocation. Journal of Corporate Finance, Vol. 39, pp. 193–209.

Levi, M. Li. K., & Zhang, F. (2014). Director gender and mergers and acquisitions. Journal of Corporate Finance, 28, 185-200.

Sila, V., Gonzalez, A., & Hagendorff, J. (2016). Women on board: Does boardroom gender diversity affect firm risk? Journal of Corporate Finance, Vol. 36, pp. 26–53.

Schwartz-Ziv, M. Gender and Board Activeness: The Role of a Critical Mass. Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

thanks all

I'm arriving late maybe on this discussion (sorry), but i want to add this: don't forget also that a proportion itself, or %age, is not enough to consider how this gender diversity IMPACTS decisions, or influences performance ... i refer to this interesting argument of "critical mass": beyond the numbers or %, the influence may not be significant if a critical mass (often reported as 3 people) is not reached on boards .. .whatever the minority group considered anyway.

I suggest those readings:

Konrad, A. M., Kramer, V. W., & Erkut S. (2008). Critical mass: The impact of three or more women on corporate boards. Organizational Dynamics, 37(2), 145–164.

Torchia, M., Calabrò, A., & Morner, M. (2015). Board of directors’ diversity, creativity, and cognitive conflict: The role of board members’ interaction. International Studies of Management & Organization, 45(1), 6-24.

Bye

It is computed as the total number of women in the board over the board size over a period

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