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Abstract
Few studies have investigated the presence of women on the boards of directors of companies. Those that have been done have focused on large firms. In this study we analyzed the gender diversity of a sample of Spanish small and medium enterprises. These firms are of great importance in terms of their number, the employment they provide, and their sales. Furthermore, there is an open debate in Spain about gender equality after the passing of several laws against gender discrimination. We found that women's presence on boards generates a negative impact on firm performance and this result may be due to less risky strategies implemented by women directors. This finding is interesting because it sheds light on how women can affect the functioning of a board. We also found that family firms and firms with a financial institution as the main shareholder tend to have more women on the board. Finally, we show that firms with less debt, more assets, and larger boards have more women as directors.
Acknowledgements
Authors thank Fundación Cajamurcia for its financial support. Besides, this paper received financial support through the project SPODE “Studii Post-Doctorale ıˆn Economie: program de formare continuă a cercetătorilor de elită”, finance contract POSDRU/89/1.5/S/61755, European Social Fund, project funded by Human Resources Development Operational Programme 2007–2013.
Notes
1. Other diversity issues such as age or tenure of directors are not considered due to lack of data.
2. System of Analysis of Iberian balance sheets, provided by Bureau Van Dijk.
3. According to the classification of Eurostat's Structural Business Statistic (SBS).
4. Stirling (Citation1998) also defines a third property of diversity, called ‘disparity,’ which refers to the nature and degree to which categories themselves (male and female in our context) are different from each other. He notes that it is ‘an intrinsically qualitative, subjective, and context-dependent aspect of diversity’ (p. 40).
5. For a comprehensive review of diversity theory and research, see Harrison and Klein (Citation2007), who propose a similar threefold decomposition of diversity to that advocated by Stirling (Citation1998).
6. Blau (Citation1977). A version of this index was originally proposed by Simpson (Citation1949) as a measure of species diversity in an ecosystem and it is also known as Herfindahl's (Citation1950) index and Hirschman's (Citation1964) index when applied to the measurement of industrial concentration.
7. Shannon (Citation1948). The index is commonly known as Shannon's ‘entropy’ index due to its formal resemblance to the entropy expression from statistical thermodynamics. It was also independently proposed by Wiener (Citation1961) and is therefore sometimes referred to as the Shannon–Wiener index.
8. Since the logarithm of 0 is not defined, if p i = 0 we adopt the convention that the expression p i ln p i = 0.
9. For more information about the differences between the Blau and Shannon indices, see Baumgartner (Citation2006).
10. See Brown and Kapadia (Citation2007).
11. The selection of the control variables is based on the previous work of Morck, Shleifer and Vishny (Citation1988), Yermack (Citation1996), Carter et al. (Citation2003), and others.
12. For the control variables, we use those in Adams, Almeida and Ferreira (Citation2005).
13. Alternatively, we have used the return on asset (ROA) as a measure of firm performance. The results obtained are very similar. We do not show them for reasons of synthesis.
14. We also calculated the logarithm of standard deviation of ROA 5 years before the annual observation as a measure of firm risk. Results are similar to the logarithm of standard deviation of ROE, so we have not reproduced them here.
