Thesis
The impact of board gender diversity on firms’ performance, employment, productivity, and financing mix
- Creator
- Rights statement
- Awarding institution
- University of Strathclyde
- Date of award
- 2025
- Thesis identifier
- T17517
- Person Identifier (Local)
- 202083114
- Qualification Level
- Qualification Name
- Department, School or Faculty
- Abstract
- Gender diversity in corporate leadership has emerged as a central concern in corporate governance research, policy discourse, and business practice. As firms face increasing pressure from stakeholders to improve boardroom inclusivity, regulators worldwide have adopted various measures—from binding quotas to voluntary guidelines—to promote female representation on boards. While significant scholarly attention has focused on the effectiveness of mandatory quotas, relatively less is known about the impact of non-binding, voluntary approaches on board composition and broader corporate outcomes. This thesis addresses this gap by investigating the organisational effects of voluntary gender diversity policies within the UK context, where the 2011 Davies Report introduced a soft-law framework encouraging firms to improve board gender balance without imposing legislative mandates. The UK’s adoption of a non-binding regulatory approach—exemplified by the 2011 Davies Report—offers a distinctive context to assess whether soft-law mechanisms can effect meaningful change in board composition and corporate outcomes. The study is guided by two core research questions: first, whether voluntary targets have successfully increased female representation on corporate boards; and second, whether board gender diversity influences key aspects of firm performance, including financial outcomes, employment practices, and capital structure. Drawing on a panel dataset of non-financial firms listed on the London Stock Exchange between 2001 and 2020, the analysis employs fixed effects and two-step system GMM estimators to address endogeneity concerns and identify causal relationships. The thesis presents three distinct yet interrelated empirical chapters, each focusing on one of the core outcome areas, thereby providing a comprehensive and multi-dimensional assessment of board gender diversity in the UK context. The first empirical chapter (Chapter 2) examines two interrelated questions: whether the Davies Report’s voluntary guidelines led to a significant increase in female board representation, and whether this change influenced firm-level financial performance. The findings suggest a generally negative association between female board representation and firm performance metrics such as ROA and Tobin’s Q, particularly in larger firms and capital-intensive industries. These results imply that while voluntary policies may increase numerical representation, integrating female directors into strategic decision-making may not yield immediate financial gains. The second empirical chapter (Chapter 3) investigates the influence of board gender diversity on employment practices and productivity. The results indicate a significant positive relationship between female board representation and employment inclusivity, employee retention, and productivity, especially in service-oriented and labour intensive sectors. These effects were amplified after the introduction of the Davies Report, suggesting that gender-diverse boards contribute to more supportive and effective internal governance practices. The chapter highlights the importance of female directors in shaping inclusive workplace policies and enhancing organisational efficiency. The third empirical chapter (Chapter 4) examines the effect of gender diversity on capital structure decisions, focusing on firm leverage. The analysis reveals that gender diverse boards are associated with higher leverage levels in the post-Davies Report period, particularly in capital-intensive industries. These findings challenge the assumption that female directors are inherently more risk-averse and suggest that women may support strategic debt financing when aligned with long-term investment objectives. The chapter also finds little to no association between gender diversity and leverage in high-risk sectors, indicating context-sensitive financial behaviour. Collectively, the findings contribute to the literature in several ways. First, the thesis offers rare longitudinal evidence on the impact of voluntary governance policies, demonstrating that such frameworks, coupled with transparency and stakeholder pressure, can lead to sustained improvements in board composition. Second, it provides multi-dimensional empirical evidence linking board gender diversity to various corporate outcomes, extending the scope beyond financial performance to include employment practices and capital strategy. Third, the study applies robust econometric techniques to account for industry-specific and firm-level variation, enhancing the reliability of causal inference. Finally, the research offers practical and policy-relevant insights, reinforcing the strategic value of gender diversity and supporting voluntary regulation as a viable alternative to binding quotas. Overall, the thesis concludes that while voluntary diversity initiatives like the Davies Report have successfully increased female board representation, their effectiveness in driving broader organisational change depends on the presence of inclusive governance practices, industry characteristics, and sustained institutional support. These findings inform ongoing debates around gender diversity policy design, providing a foundation for evidence-based governance reform in the UK and internationally.
- Advisor / supervisor
- Hillier, David
- Paudyal, Krishna
- Resource Type
- DOI
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PDF of thesis T17517 | 2025-10-27 | Public | Download |