European Board Quality and Female Representation: The Impact of Quotas

Abstract

This paper examines the relationship between the presence of female board members and board quality across two groups of European countries between 2000 and 2011. Using simultaneous regression analysis, we find that female representation is associated with board quality and board independence. Our findings suggest that in the Nordic countries, the greater the female percentage of board members, the greater the independence on the board. Quotas decrease this positive association. In the Southern Europe, the greater the percentage of females, the lower the board independence, but voluntary gender quotas help in reducing this negative relationship. The paper provides empirical evidence that the quality of the board varies based on the gender of directors. In Nordic countries, females appear to improve board quality while the opposite is true in Southern Europe. There is also evidence that three females on the board improves board quality. This paper also reveals that voluntary and required quotas do affect board structure.