RSFAS Seminar | Professor Kathleen Kahle

Speaker: Kathleen Kahle

Institution: the University of Arizona

Title: How Deep Is the Labor Market for Female Directors? Evidence from California’s Board Gender Diversity Mandate

Abstract: We examine the repercussions of California Senate Bill No. 826, an exogenous shock to the demand for female director candidates. We find evidence that women appointed post-SB 826 are less likely to have executive, financial, or legal experience compared to those appointed pre-SB 826. The market response to female director appointments in the post-SB 826 period is lower than in the pre-period, but the difference is not significant. However, a difference-in-differences analysis shows that the market reaction to male directors is also lower post-SB 826 than pre-SB 826 and that these men are less likely to have legal or financial experience. Overall, our analysis indicates that directors appointed post-SB 826 have lower qualifications than directors appointed pre-SB 826 but that there are few significant differences between male and female directors in terms of qualifications. These results are inconsistent with a supply shortage of qualified female director candidates.