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Variety is the Spice of Life - and Boardrooms

Author

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  • Carol Padgett

    (ICMA Centre, Henley Business School, University of Reading)

Abstract

We examine the impact of board diversity on both the corporate value and equity risk of British companies since the financial crisis. We find that the inclusion of overseas directors on boards improves market value and reduces equity risk. When the number of female directors included on the board reaches a critical mass this also increases corporate value but has no effect on risk. These findings do not change when we allow for the presence of board members who are qualified accountants or who hold MBAs. Diversity in and of itself has a significant effect on corporate performance.Length:

Suggested Citation

  • Carol Padgett, 2014. "Variety is the Spice of Life - and Boardrooms," ICMA Centre Discussion Papers in Finance icma-dp2014-11, Henley Business School, University of Reading.
    • Handle: RePEc:rdg:icmadp:icma-dp2014-11
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    More about this item

    Keywords

    corporate value; risk; board diversity; gender; nationality;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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