Does Mandatory Board Gender Balancing Reduce Firm Value?

As a social-policy instrument, forced board-gender balancing is in principle unrelated to firms’ economic performance. Nonetheless, imposing such a policy may have unintended consequences (positive or negative) for firm value, which is important for all of a firm’s constituencies – not only shareholders – to understand properly.

In other words, the potential valuation effect of forced director-gender balancing is an empirical question. Our research addresses this important issue using the powerful setting provided by Norway’s pioneering quota law from 2003. This law, which regulated all Norwegian public liability companies (“Allmennaksjeselskaper” or ASA, which can raise equity capital from the … Read more