Does boardroom gender diversity affect shareholder wealth? Evidence from bank mergers and acquisitions

Abstract

We explore the effect of the presence of female directors in boards of directors on the economic impact of bank mergers and acquisitions (M&As). Using a unique, hand-collected dataset on 1,130 M&As announced by U.S. banks between 2003 and 2018, we find a significant negative relationship between female board membership and shareholder wealth after the banking crisis. Our results are robust to alternative model specifications that control for different proxies for gender diversity, heteroskedasticity, endogeneity and firm-specific variables. Our findings suggest that board gender diversity should be promoted with caution, and policy makers should acknowledge its limitations as a corporate governance mechanism.