No Woman, No Cry? - A study of board members’ gender and its impact on company performance

Abstract: In recent history, gender diversity has become a frequent subject of discussion in the context of company boardroom and performance. Affirmative action is debated and some countries, like Norway in 2003, have chosen side and taken concrete legal action. The arguments for and against gender quotas range from qualitative ideological reasoning to more quantifiable statements. However, it seems that too few studies have been conducted in order for a gender quota to be financially justifiable to corporations. Due to this and since the upcoming Swedish election might lead to affirmative actions being introduced in Sweden, this thesis aimed to determine whether board members’ gender has an impact on companies’ financial performance. Data from approximately 185 publicly listed Swedish companies over the 2003-2008 period, has been used to investigate whether gender affects the corporate financial performance measures of: revenue, stock returns and return on assets. By using econometric methods for panel data, it was concluded that no significant relationships could be established between the female ratio and stock returns or revenues. However, a significant negative impact on the return on assets measure was found.