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ralph lauren polo

Etienne Redor
''Does board diversity matter? Evidence from the market reaction to directors' departures.''
( 2015, Vol. 35 No.2 )
Previous studies that have examined the impact of board diversity on firm financial performance have yielded conflicting results. One of the main challenges for studies looking at the impact of diverse directors stems from the fact that firm financial performance and board of director composition may be endogenously determined. In this paper, we propose an innovative approach to the problem of endogeneity. By analyzing the reaction of the stock market when a diverse director's departure is announced, we can examine investors' perceptions of the importance of changes in board diversity. Our results show that investors value gender diversity among directors; however, we are unable to conclude that investors value ethnic diversity among directors.
Keywords: Gender diversity; Ethnic diversity, Board of directors, Financial performance, Departure.
JEL: G3 - Corporate Finance and Governance: General
Manuscript Received : Apr 16 2015 Manuscript Accepted : Jun 09 2015

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