Harvard University – Harvard Kennedy School (HKS); Northeastern University – Finance and Insurance Area; Harvard University – Edmond J. Safra Center for Ethics
March 3, 2013
I examine 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 committee meetings of eleven such companies. I find that boards that included critical masses of at least three directors of each gender, and particularly of three women, were approximately twice as likely to request further information and to take an initiative, compared to boards without such critical masses. The ROE and net-profit-margin of these companies is also significantly larger if they have at least three women directors.