Board Gender Diversity Is Linked to Beneficial Outcomes for Firms

Abstract

Over 500 studies have examined whether there is a relationship between the presence of women on corporate boards and firm performance, both financial and non-financial. Many findings indicate a beneficial effect of including more women as board directors. While a large number of studies show beneficial associations between women’s presence on boards and financial performance, some detrimental findings have been reported. Findings for non-financial performance are more clearly beneficial, indicating that women board directors are associated with more corporate social responsibility, renewable energy usage, customer safety, stronger accounting systems, less fraud and failure, less risk, and better strategic choices regarding innovation, leverage, mergers and acquisitions. Altogether, the findings can be interpreted as indicating women on corporate boards are associated with enhanced non-financial performance without a cost to financial performance.