Impact of Women in the Boardroom on Governance and Performance

Data and Model Estimation
The research is done on the basis of Investor Responsibility Research Centre(IRRC)
annual publication. Through this data, information about the directors and their attendance
routine has been gathered.Financial information about the directors were collected and
merged with ExecuComp.The stock prices of the firms have been collected from CRSP and
SIC codes and business segment data from Compustat. For measuring the performance of
selected firms,proxy for Tobin’s q and Return on Assets (ROA) has been used. Means of
various firms’ characteristics have been calculated to understand the difference in the
performance of Tobin’s q and ROA, of the firm’s having female directors and those without
female directors.
The research done is on “Women in the boardroom and their impact on governance and
performance” and there are a few endogeneity concerns that arise because of omitted firm’s
characteristics that have been unobserved and reverse casualty concern. Such problems have
been addressed by means of Instrumental Variables (IV) methods.
To test the hypothesis that,gender diversity in boardroom affects governance,
empirical/econometric model has been used.To understand whether there is an impact of
gender diversity in board governance, governance characteristics of boards with more
diversity is compared with those having less diversity. For that matter, relation between
gender and attendance behavior and also, between gender and committee assignments have
been studied. Also, relationship between gender diversity and board level characteristics and
choices and also, between gender diversity and equity-based compensation for directors have
been studied.
To make sure that there is a complete picture of women representing the boardroom, entire
IRRC database has been used. It helped to understand the actual picture of gender diversity in