The impact of the 2012 NZX listing rule change on board composition and company performance
ISSN: 0114-0582
Article publication date: 25 November 2020
Issue publication date: 11 December 2020
Abstract
Purpose
This study aims to examine the impact of December 2012, New Zealand (NZ) stock exchange operator listing rule change that introduced compulsory disclosure about gender diversity on NZ boards.
Design/methodology/approach
A quasi-natural experiment setting with a clearly identifiable exogenous event.
Findings
The rate of growth in female-held directorships increased significantly after the introduction of the new rule, resulting in, by 2016, the average female board representation being more than double what it had been in 2012. However, this paper finds no relationship between this response and company performance.
Research limitations/implications
This study cannot attribute causality to the observed jump in female directorships following the 2012 listing rule change due to the absence of a control group of firms not subject to this change.
Practical implications
The results are consistent with an efficient director appointment process in NZ.
Originality/value
Low-key regulatory changes can have a significant impact on company behaviour.
Keywords
Acknowledgements
For helpful comments on earlier working paper versions (available at SSRN), we are grateful to Tom Coupe, Rohan Boyle, Eric Crampton, seminar participants at Canterbury and the 2019 NZ Finance Colloquium. An anonymous PAR referee also provided very useful suggestions. As always, none bear any responsibility for remaining errors and ambiguities.
Citation
Boyle, G., Hong, S. and Foley, M. (2020), "The impact of the 2012 NZX listing rule change on board composition and company performance", Pacific Accounting Review, Vol. 32 No. 4, pp. 543-562. https://doi.org/10.1108/PAR-07-2019-0091
Publisher
:Emerald Publishing Limited
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