Additions to Corporate Boards: The Effect of Gender

During the decade of the 1990s the number of women serving on corporate boards increased substantially. Over this decade, we show that the likelihood of a firm adding a woman to its board in a given year is negatively affected by the number of woman already on the board. The probability of adding a woman is materially increased when a female director departs the board. Adding a director, therefore, is clearly not gender neutral. Although we find that women tend to serve on better performing firms, we also document insignificant abnormal returns on the announcement of a woman added to the board. Rather than the demand for women directors being performance based, our results suggest corporations responding to either internal or external calls for diversity.

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	Farrell, Kathleen A Senior Associate Dean of the UNL College of Business Administration Expertise: Corporate Finance Executive Compensation Finance CBA 214 P.O. Box 880490 University of Nebraska-Lincoln Lincoln, NE 68588-0490, USA Phone: (402) 472-3005 Fax: (402) 472-5140 kfarrell2@unl.edu	Farrell, Kathleen A	Finance