INSEAD research finds investors are not walking the talk of gender diversity
Middle East, Asia, Europe
29 November 2019
In recent years investors have become vocal advocates for gender-diverse boards. But how committed are they?
New INSEAD research suggests that despite proclamations of support, investors perceive companies which increase female representation on their board as having a weaker commitment to shareholder value and are likely to punish them accordingly.
Specifically, it found that:
- Among the firms that had made other investments in gender diversity, the appointment of female directors to the board reduced the firm’s market value relative to the value of the company’s physical assets by almost 6 percent.
- The market penalty is unrelated to actual board performance
- The effect dissipates after two years