Mandatory Gender Quotas vs. Voluntary Targets in Corporate Boards: Can we Expect Different Types of Women Being Hired? : Evidence from Norwegian and Australian Corporate Boards

Abstract: The objective of this study is to empirically investigate the differences in human capital profile of new appointed female directors to corporate boards as a result of mandatory quotas and voluntary targets. By exploring differences in age, and human capital differences in board tenure, executive experience (CEO, CFO), number of qualifications, and the number of directorships held by these women, this study contributes to the important and current international public policy decision debate on relevance and wisdom of adopting a mandatory gender quota or introducing voluntary targets. The study uses human capital theory to evaluate the profiles of 41 new female directors appointed through a mandatory quota in Norway and 397 new female directors appointed through voluntary targets in Australia and extends the current corporate governance literature on board gender regulation by exploring whether female directors differ in human capital as a result of the two types of regulations. The results of this study show that new female directors hired through a quota are on average younger than new female directors hired through a target; new female directors hired through a quota are less likely to have more years of board experience than new female directors hired through a target; new female directors hired through a quota are likely to have more years of executive experience than new female directors hired through a target; and new female directors hired through a quota have lower number of qualifications than new female directors hired through a target. These results, albeit contrary to the hypotheses developed in this study, propose several important implications from an academic, management, and policy point of view while at the same time have limitations that present opportunities for future research.