Chapter 7 Women on Boards of Directors and Firm Performance: Evidence from Denmark and Norway

Abstract

In this chapter, we have analysed the relationship between the proportion of women on board of directors and firm performance in Norway and Denmark. These countries are, in an international context, considered similar in many respects. However, during 2002–2007, the two countries experienced quite different developments regarding the gender diversity on companies' boards, caused by the Norwegian board reform affecting public limited firms. These changes increase the relevancy for analysing and comparing the relationship between gender diversity and firm performance in the two countries. The results for Denmark reveal no significant relationships between the proportion of women on boards and firm performance. As there was no quota policy in place in Denmark in this period, the proportion of women on boards has been quite constant. Therefore, it is hardly surprising that we observe no significant relationships. The results for Norway reveal first a positive relationship between the proportion of women on boards of directors and firm performance. This relationship does hold after controlling for a wide set of firm characteristics. Can this be explained by the quota? No, our robustness analyses suggest not. The results indicate that the short-term relationship between gender diversity and firm performance is negligible. Neither for public limited firms nor for limited firms, can firm performance during this period really be attributed to women on boards. Thus, from a gender equalisation point of view, it appears that one has achieved increased gender diversity on Norwegian boards, without affecting firm performance.

Citation

Dale-Olsen, H., Schøne, P. and Verner, M. (2012), "Chapter 7 Women on Boards of Directors and Firm Performance: Evidence from Denmark and Norway", Engelstad, F. and Teigen, M. (Ed.) Firms, Boards and Gender Quotas: Comparative Perspectives (Comparative Social Research, Vol. 29), Emerald Group Publishing Limited, Leeds, pp. 211-234. https://doi.org/10.1108/S0195-6310(2012)0000029011