The Big Three and Board Gender Diversity: The Effectiveness of Shareholder Voice

The Big Three and Board Gender Diversity: The Effectiveness of Shareholder Voice

Todd Gormley, Vishal K. Gupta, David A. Matsa, Sandra C. Mortal, Lukai Yang

Series number :

Serial Number: 
714/2020

Date posted :

December 06 2020

Last revised :

March 18 2023
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Keywords

  • Gender Diversity • 
  • directors • 
  • Institutional ownership • 
  • indexing

In 2017, “The Big Three” institutional investors launched campaigns to increase gender diversity on corporate boards. We estimate that their campaigns led American corporations to add at least 2.5 times as many female directors in 2019 as they had in 2016.

Firms increased diversity by identifying candidates beyond managers’ existing networks and by placing less emphasis on candidates’ executive experience. Firms also promoted more female directors to key board positions, indicating firms’ responses went beyond tokenism. Our results highlight index investors’ ability to effectuate broad-based governance changes and the important impact of investor buy-in in increasing corporate-leadership diversity.

Published in

Published in: 
Description: 
Journal of Financial Economics, Forthcoming

Authors

Real name:
David A. Matsa
Real name:
Sandra C. Mortal
Real name:
Vishal K. Gupta
Real name:
Lukai Yang