Board Gender-Balancing and Firm Value

In 2005, Norway was the first country to mandate gender-balanced corporate boards, forcing the percentage of female directors to 40% by 2008. Our robust valuation estimation and operating performance analysis fail to reject a value-neutral impact of the quota, even for firms with all-male boards. We further show that firms maintained overall board CEO experience, and that they refrained from either increasing board size (to keep male directors) or changing legal form to avoid mandatory gender-balancing altogether. This apparent indifference to the quota constraint strongly suggests that it was viewed as a low-cost regulation by existing shareholders as well as by market participants.