Corporate Governance, Board Diversity, and Firm Value
David Carter1
Oklahoma State University,
2
Oklahoma State University [email protected]Betty J. Simkins1
Oklahoma State University,
2
Oklahoma State University [email protected]Wayne Simpson1
Oklahoma State University,
2
Oklahoma State University [email protected]
2003en
ABI
Abstract
This study examines the relationship between board diversity and firm value for Fortune 1000 firms. Board diversity is defined as the percentage of women, African Americans, Asians, and Hispanics on the board of directors. This research is important because it presents the first empirical evidence examining whether board diversity is associated with improved financial value. After controlling for size, industry, and other corporate governance measures, we find significant positive relationships between the fraction of women or minorities on the board and firm value. We also find that the proportion of women and minorities on boards increases with firm size and board size, but decreases as the number of insiders increases.
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Cited by 30 references