Does female board representation influence firm performance? The Danish evidence

Abstract

Board diversity has become a major issue within corporate governance where a number of studies seek to explore the impact of diversity on firm performance. The debate focuses on questions such as whether a corporation’s board should reflect the firm’s stakeholders or be more in line with society in general. This article uses a sample of listed Danish firms during the period of 1998–2001 in a cross sectional analysis. Despite that fact that Denmark has gone very far in the liberalisation of women, Danish board rooms are still to a large extent dominated by men. Contrary to a number of other studies, this article does not find any significant link between firm performance as measured by Tobin’s Q and female board representation. This is also the case for board members’ educational background as well as the proportion of foreigners. It is argued that board members with an unconventional background are socialised unconsciously adopting the ideas of the majority of conventional board members, which entails that a potential performance effect does not materialise.