The Gender Contribution to the Corporate Goverance and the Corporate Performance (Lessons from the E.U.)

We investigate whether gender can be considered part of the corporate governance structure and, accordingly, its real impact on corporate performance. Based on our analysis of 21,382 European companies and 2,159 ones in the U.K., we focus on the impact of mandatory female percentages (pink quotas) based on the proposed EU directive, which aims to push female representation toward their natural percentage of the home population. We find that gender explains differences among the corporate governance solutions as adopted at national level. This fact holds regardless of whether the specific country has already adopted any regulation in accordance with the EU proposal. In fact, governance choices are more rooted into the country culture, although the single national governance schemes differentiate whether the managerial roles are mainly covered by females or males. The EU directive appears to be unable to reduce the gaps between the schemes of governance adopted across the EU, as there is no economic incentive to do so. Indeed, gender and governance do contribute to capital intensity of EU companies and their funding, as suggested by previous literature, but have no impact on corporate ROI or its persistence. Surprisingly, far from it, we find that female gender attracts more equity capital, regardless of the operating risk level. However, there is evidence that in the unregulated U.K. market, gender does influence ROI.