Does the Market Price Demographic Diversity in the Boardroom? Evidence from an Emerging Market

Abstract

In this study, we investigate the market reaction to the appointments/departures of directors from various demographic backgrounds to/from the boards of public firms listed at the Borsa Istanbul between 2012 and 2014, via a unique handcollected dataset. Our findings suggest that investors in Turkish capital markets do not appear to value the gender or nationality of members of board of directors. However, they appear to value the age of directors. When relatively older directors leave the boards of public firms, significant negative market reaction is observed.