Research pick: Chairperson of the Board - "Gender diversity on corporate boards: does it really make a difference?"

How much does gender diversity on the corporate board matter to the company’s bottom line? A new study in the International Journal of Governance and Financial Intermediation looks to answer that question.

M. Luisa López-Pérez of the University of Santiago de Compostela in Lugo, Spain, explains how the corporate board is a body that is responsible for governing the company, setting its principles and ultimately determining how well the company performs in the context of external factors. The research shows that women bring unique values, knowledge, and skills to the company board. However, despite many advances in gender diversity, the presence of women on corporate boards remains low. The findings of the research suggest that increasing the proportion of women on corporate boards can only benefit the companies that follow this plan of action.

López-Pérez has carried out a comprehensive review of earlier work in this area but also examined how the influence of gender diversity on the corporate board extends beyond the mere presence of women. She adds that financial results together with social and environmental performance are affected by the presence of women on the board, moreover, the interests of shareholders and stakeholders are more likely to be considered by female directors. However, the appointment of women to boards continues to be at a low rate and that factors other than the likely performance benefits are considered in the choice to continue largely appointing men instead.

The findings add to the literature on gender equality at the corporate level. The future must see that “women on boards are no longer considered a minority group and that truly egalitarian boards are formed,” says López-Pérez. She adds that the next step in this research area will be to analyse the personal and professional values that female directors bring to the corporate board. This will allow us to gain a clearer understanding of the influence of female directors on board governance.

López-Pérez, M.L. (2022) ‘Gender diversity on corporate boards: does it really make a difference?’, Int. J. Governance and Financial Intermediation, Vol. 1, No. 3, pp.219–235.