When do investors value board gender diversity?

Christopher Groening (Department of Marketing and Entrepreneurship, Kent State University College of Business Administration, Kent, Ohio, USA)

Corporate Governance

ISSN: 1472-0701

Publication date: 4 February 2019



This paper aims to use the passage of the Italian Gender Diversity Law to help isolate the effects of board gender diversity on firm value by investigating conditions under which such diversity provides greater role-enhancing resources to the board.


This paper used a one-day event study to measure when gender diversity matters to investors. Abnormal returns from Italian firms were used to study investors’ anticipated outcomes of the effect of gender diversity on firm value.


Board gender diversity is financially beneficial especially for firms with a male dual CEO and board chair and with few or no women on board committees and firms that operate in industries with greater levels of competition. Addition of these moderators more than doubles the variance explained. Moreover, the effect of gender is isolated in this study, which examined investor reaction to the expectation of increases in the number of female board members, rather than to specific female appointees.

Social implications

Determining the conditions when a gender diverse matters to firm value is important for shareholders, policymakers and advocates for gender equality. The findings illustrate precise conditions for stakeholders to make the case for board gender diversity as achieving financial reward, in addition to societal benefit.


The value of a gender diverse board is contingent on the company’s need for diverse resources (e.g. more competition, lack of gender diversity on committees or CEO duality). This paper provides insight as to why prior research linking board gender diversity to firm value finds seemingly contradictory results. Thus, this paper provides useful insights for researchers, boards and legislative bodies.



Groening, C. (2019), "When do investors value board gender diversity?", Corporate Governance, Vol. 19 No. 1, pp. 60-79. https://doi.org/10.1108/CG-01-2018-0012

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