The
Financial Impact of Gender Diversity on Corporate Boards
Lizzie
Hamilton / ehamilton@bellarmine.edu / Brad Stevenson
The purpose of this
study is to investigate the relationship between gender diversity and firm
financial performance, using a data set of 50 S&P 500 companies during
2015-2019. Financial performance data (ROA and ROE) and demographic data of
board composition were collected. Gender diversity was measured through the
percentage of women on the board and whether the board has a “critical mass”
(of at least three women). In the results of the regression analyses, some
significant relationships between variables were found. The regression between
ROA and the percentage of women indicated that there was a positive correlation
between the percentage of women, average age, and firm size and ROA. These
results were statistically significant at a 95% confidence level. For the
regression between ROA and the critical mass variable, average age and firm
size were again statistically significant. For both regressions with ROE,
average age and firm size were statistically significant at a 95% confidence
level. The results indicate that a critical mass may not be necessary for women
to have a positive impact on a firm’s ROA. They also imply that ROE is not
correlated with board gender diversity.
