Female directors relationship to financial performance. : A study of female directors impact on financial performance and the presence of "glass cliff" in Sweden.
Sammanfattning: Gender diversity within the boardroom is an important theme in the research of corporate governance. The lack of female directors during recent years have raised attention where the prejudice against women have been a central theme. Especially, in a gender egalitarian country as Sweden. The purpose of the study is to examine the relationship between female directors and financial performance, but also the presence of the “glass cliff” theory. The study is based on companies listed on Large Cap in Sweden, where data are collected from annual reports and a database. The collected data are analyzed by several statistical methods. The findings show that female directors do have a positive impact on a company’s financial performance, in terms of accounting-based measurements. However, the market-based measurement does not a provide a significant relationship to female directors, indicating that the Swedish stock market does neither positively or negatively react to a more gender diverse board. As no differences in performance are seen preceding the appointments of females compared to males, no evidence for the “glass cliff” is found. The findings suggest that female directors may enhance the performance of a company and disproves the prejudice against women. Further, the findings indicate that the Swedish boards are becoming more diverse, where precarious situations are not the reason for women to be appointed to the board.
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