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The importance of co-determination for gender diversity in the boardroom

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Abstract

This study examines the interplay of co-determination law and board gender quotas using novel board-director panel data for Norway. We present descriptive evidence suggesting that boards with employee representatives on boards of directors were more gender diverse before the gender quota. Difference-in-differences estimation results reveal that the differential effect of employee representation on gender diversity is negative after implementing the quota. Boards with employee representatives have recruited fewer women during the phase-in period and the flexible quota tended to be ineffective. We interpret the effect through employee representation as a potential mediating factor of board gender quotas on gender diversity.

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  • Kunze, Astrid & Scharfenkamp, Katrin, 2025. "The importance of co-determination for gender diversity in the boardroom," Discussion Paper Series in Economics 12/2025, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2025_012
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    More about this item

    Keywords

    Employee representation; boards of directors; gender; leadership affirmative action; public policy; shareholder directors; firm size;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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