Gender Diversity on the Board - BI Norwegian Business School

GRA 19001 Master Thesis
women overall are elected as board directors in nonlisted firms. Hence, it becomes
difficult to draw any conclusions with certainty based on such grounds.
By examining certain governance characteristics, we have found that firms with diverse
boards are different from firms with less diverse boards. In our model we assume that
this is the case because they act as independent directors. An interesting area of future
studies could be whether such diversity can actually enhance board effectiveness in these
firms.
7.1 Limitations
The fact that governance characteristics are examined for a period of only eight years, is
considered a limitation of this thesis. The variables in our model are also very persistent,
and can cause problems because observations with no within-firm variation over time
are not used for estimating the coefficients in the regression. The fact that the results
from pooled OLS and the between model are close, shows that this can be the case in
our model. It would be interesting to study these characteristics over a longer period of
time if data was available.
Another limitation of our paper is that we assume that female stockholder-elected
directors act as independent directors. This will not always be the case. Diverse boards
may be different from less diverse board simply because the board director is female,
and not due to independence.
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