Emerald Management Reviews

Design/methodology/approach - Drawing on agency theory and stakeholder theory, analyses data from 230 firms identified from the 2001 to 2003 Catalyst censuses of female directors, and the 2002 and 2004 Catalyst censuses of women officers in the Financial Post's list of the 500 largest Canadian firms. Splits the sample into three layers allowing comparison between firms with a low proportion of women and those with a high proportion of women. Uses univariate and multivariate analyses to test for significant differences between the two groups with regard to financial performance, taking into account the level of risk and complexity (drawing on Fama and French's valuation framework).

Findings - Reports that firms operating in complex environments that have a high proportion of women officers experience positive and significant abnormal returns. This result is not seen when there is a high proportion of women directors but firms with a high proportion of women in both management and governance generate enough value to keep up with normal stock market returns. Indeed, given the 'glass cliff' hypothesis (that women are often appointed to leadership positions under problematic organizational circumstances associated with greater risk of failure and criticism), female directors may be outperforming their male counterparts since they may start from a less promising position to begin with.

Research limitations/implications - Mentions, briefly, directions for future research.

Originality/value - Provides evidence to support the implementation of policies that overtly seek to foster the advancement of women in business.