Do female directors create value for the shareholders? Case study of New Zealand publicly listed companies

The potential contribution from moving toward an even gender balance for those bodies charged with corporate governance, especially boards of directors, is discussed in this paper. Prior empirical research, reported in the literature, provides conflicting results. The likelihood of these opposite findings resulting from endogeneity suggests a dynamic GMM model as a preferable tool for analysing gender balance on boards. Agency theory is core for finance modelling of governance and increasing from the low level of female director proportion on boards reduces agency costs in the publicly listed companies in New Zealand. The positive effects diminish as the proportion of female directors reach higher levels. Is it the gender balance or competency set of the board contributing the gains? Our interpretation is that gender diversity quotas for women need to focus on acquiring relevant skills and qualifications required in boardrooms and gradually increasing participation goals is likely to be most efficacious through signalling the core competency base for improved performance.