Note: The following new research paper is from Miriam Schwartz-Ziv, Fellow, Program on Corporate Governance, Harvard Law School and PhD Candidate, Department of Finance, Hebrew University of Jerusalem, Israel.
Does the Gender of Directors Matter?
Abstract: How does gender-balance affect the working of boards of directors? I examine boards that have been required for two decades to be relatively gender-balanced: boards of business companies in which the Israeli government holds a substantial equity interest. I construct a novel database based on the detailed minutes of 402 board- and board-committee meetings of eleven such companies. I find that boards that had critical masses of at least three directors of each gender in attendance, and particularly of three women, were approximately twice as likely both to request further information and to take an initiative, compared to boards that did not have such critical masses. A 2sls model confirms these results. Consistent with these findings, the ROE and net profit margin of these type of companies is significantly larger in companies that have at least three women directors. At the level of the individual directors, men and especially women directors were more active when at least three women directors were in attendance. In addition, women directors were found to be more likely than men directors to take actions concerning supervisory issues.
Other board related paper:
What Do Boards Really Do? Evidence from Minutes of Board Meetings
Charles A. Dice Working Paper No. 2011-19, Fisher College of Business Working Paper No. 2011-03-19, Miriam Schwartz-Ziv and Michael S. Weisbach , Hebrew University of Jerusalem – Department of Finance and Banking and Ohio State University (OSU) – Department of Finance.