The Big Three and Board Gender Diversity: The Effectiveness of Shareholder Voice

64 Pages Posted: 25 Nov 2020 Last revised: 18 Feb 2021

See all articles by Todd A. Gormley

Todd A. Gormley

Washington University in St. Louis; European Corporate Governance Institute (ECGI)

Vishal K. Gupta

University of Alabama - Department of Management

David A. Matsa

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER)

Sandra Mortal

University of Alabama - Culverhouse College of Commerce & Business Administration

Lukai Yang

University of Alabama

Date Written: February 10, 2021

Abstract

In 2017, “The Big Three” institutional investors launched campaigns to increase gender diversity on corporate boards. We estimate that their campaigns led firms to add at least 2.5 times as many female directors in 2019 as they had in 2016 and to promote female directors to key board positions. Firms increased female representation by relying less on managers’ existing networks to identify candidates and by placing less emphasis on candidates’ executive experience. Our results highlight index investors’ ability to influence firms’ governance structures and shareholder advocacy’s potential to expand women’s participation in corporate leadership more fully than government mandates.

Keywords: gender diversity, directors, institutional ownership, indexing

JEL Classification: D22, G23, G30, G34, G35

Suggested Citation

Gormley, Todd A. and Gupta, Vishal K. and Matsa, David A. and Mortal, Sandra and Yang, Lukai, The Big Three and Board Gender Diversity: The Effectiveness of Shareholder Voice (February 10, 2021). European Corporate Governance Institute – Finance Working Paper 714/2020, Available at SSRN: https://ssrn.com/abstract=3724653 or http://dx.doi.org/10.2139/ssrn.3724653

Todd A. Gormley (Contact Author)

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
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(314) 935-7171 (Phone)

HOME PAGE: http://www.gormley.info

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
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Belgium

Vishal K. Gupta

University of Alabama - Department of Management ( email )

101 Paul W. Bryant Dr.
Box 870382
Tuscaloosa, AL 35487
United States

David A. Matsa

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-8337 (Phone)
847-491-5719 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Sandra Mortal

University of Alabama - Culverhouse College of Commerce & Business Administration ( email )

Culverhouse College of Business
Tuscaloosa, AL 35487-0223
United States

Lukai Yang

University of Alabama ( email )

101 Paul W. Bryant Dr.
Box 870382
Tuscaloosa, AL 35487
United States

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