Towards gender parity : female directors' impact on firm policies : a study on the Norwegian boardroom gender quota

2020

After a 20-year period of frequent introductions of board gender diversity quotas in European

countries, this paper examines the e ect on rm policies of the rst mover, the Norwegian

quota. Looking at several performance measures, nancial and investment policies, and

labor policies, we nd that the results highly depend on the method used to handle the

endogeneity issue introduced by the optional timing of compliance within a two-year period.

However, our results suggest small or no impact on the performance measures return on

assets and asset turnover. Cash holdings and capital expenditures relative to assets, and

dividend ratio seem to have declined for the companies obliged to follow the quota after

the enforcement, while the debt ratio appears to have increased. Studying labor policies

give mixed results; however, total labor costs seem to have increased while CEO pay has

decreased. In addition, the fraction of female directors on the board appears to lead to a

decrease in performance-sensitivity of CEO turnover.