The phenomenon of the gender and ethnic diversity of corporate boards encompasses at least two significant, and interrelated, propositions. The first viewpoint holds that those competent women and ethnic minorities with the human capital, external networks, information, and other characteristics of importance to the corporation deserve opportunities to serve on corporate boards and in upper management. The second proposition suggests that gender and ethnic diversity of directors results in better governance which causes the business to be more profitable. It was summarized by Karen J. Curtin “There is real debate between those who think we should be more diverse because it is the right thing to do and those who think we should be more diverse because it actually enhances shareholder value.” (Brancato & Patterson, 1999).
In order to ensure sustainable functioning of the capital market, European Union Commission has introduced the Directive about gender parity among non-executive directors of stock exchange listed companies. By 2020, in companies employing more than 250 employees with a turnover of 50 million € or total assets of over 43 million € will be introduced 40% women employment quota in the above-mentioned positions.
In November 2012, boards are dominated by one gender: 85% of non-executive board members and 91.1% of executive board members are men, while women make up 15% and 8.9% respectively. In three years from October 2010 to October 2013 the share of women on boards increased in 22 of the 28 EU member states. The biggest increase was observed in France, Slovenia, the Netherlands and Germany. While it decreased in Romania, Hungary and Czech Republic. In 2013 the average EU-28 share of women in boards was 17.8% but in Poland it equaled 12.3% (in Finland and France nearly 30%, and in Latvia - 29%).
The aim of the study is analysis of the share of women in management of the companies listed on The Warsaw Stock Exchange in the years 2010-2014, and investigation if increasing of this share influences the financial performance of firms. The research is conducted using data from Notoria-Serwis regarding executive and supervisory boards.
The results of investigation show that:
· The share of women in boards is much smaller than men. During last 4 years no essential changes is visible. There are only 7-8% presidents – women. Therefore, in our opinion, there is no chance to obtain the women parity level in boardrooms (ordered by the EU) till 2020, which may result in penalties for the companies.
· There is no significant correlation between the increase of the women share in boards and financial performance of public companies. However our results might be biased by the length of the sample, and small share of women in boards of Polish enterprises.
- Campbell K., Minguez-Vera A., 2008, Gender diversity in the boardroom and firm financial performance, Journal of Business Ethics, Vol. 83(3), p. 435-451.
- Brancato C. K., Patterson D. J., 1999, Board diversity in U.S corporations: Best practices for broadening the profile of corporate boards, The Conference Board, Research Report.
- Carter D. A., D’Souza F., Simkins B. J., Simpson W. G., 2010, The Gender and Ethnic Diversity of US Boards and Board Committees and Firm Financial Performance, Corporate Governance: An International Review, Vol. 18(5).
- Joecks J., Pull K., Vetter K., 2012, Gender diversity in boardroom and firm performance: What exactly constitutes a “critical mass”?, Journal of Business Ethics, Vol. 118(1).
- Richard O. C., Barnett T., Dwyer S., Chadwick K., 2004, Cultural diversity in management, firm performance, and moderating role of entrepreneurial orientation dimensions, Academy of Management Journal, Vol. 47(2).