Women on Board and Firm Performance

This study addresses the research question of whether companies with female directors on the board have a higher average performance than companies with no female directors. The debate about the low representation of women in the top management of companies involves both moral arguments (equality between men and women) and economic arguments (companies with more women perform better). This study investigates the financial performance of 99 Dutch listed companies with and without women on the board. The analysis extends earlier used methods of Catalyst and McKinsey, two studies that are often cited in the literature (although both have a number of methodological shortcomings). This article adds to the international debate and applies useful methods to 99 listed companies in the Dutch Female Board Index. The results contribute to this often normative debate. They show that firms with women perform better than those without women. The differences are statistically significant for return on equity. Regression analyses confirm these findings.Open access available at: DOI:10.1007/2Fs10997-011-9186-1