Gender equality in the boardroom : the Norwegian case of Rosa Parks? : an event study

Abstract

As the only country in the world, Norway recently passed a law that requires gender neutral boards in all public listed companies. Although the media attention abroad and in Norway, gorged on the controversial ruling, there is an absence of research done on the effects of changing the gender composition of a corporate board. In our event study we propose an approach to valuing the effects of a change in the gender composition of Norwegian, stock exchange listed, corporate boards. We investigate the effects of the legal requirement and look at differences between size and industry. Analysis of 44 events reveals an insignificant, market adjusted decline in the value of companies of -1.96% where there is an increase in the number of female board members. Our results additionally show a larger, insignificant effect for events captured before the enactment of the law for smaller companies and differences between certain industries.