Boardroom gender diversity and performance of listed companies in Italy


Boardroom gender diversity and performance of listed companies in Italy

G.S.F. Bruno, A. Ciavarella, N. Linciano

Quaderno di finanza (Working Paper) No. 87 - September 2018 [PDF]

The proportion of women in boardroom has traditionally been low around the world. Over the last decades, several jurisdictions have adopted legislative actions in order to trigger a tangible progress in female representation, also moving from the assumption that gender balanced boards result in improved corporate governance and performance. The investigation of the relationship between female boardroom representation and firm value is therefore key on policy grounds. The empirical evidence gathered so far is however inconclusive, given that potential reverse causality may bias results. In Italy, the Law 120/2011 envisaged mandatory quotas for the three board appointments subsequent August 2012, by setting out a minimum objective of one-third of the corporate board seats for members of the under-represented gender, lowered to one-fifth for the first term. The Italian law has introduced an exogenous shock in board composition, which may enable to overcome the endogeneity problem potentially impairing the analysis of boardroom diversity. This paper contributes to the literature by analyzing both the effectiveness of the Law in terms of its impact on boardroom gender diversity and on other board attributes, and by analyzing the impact of gender quotas on the profitability of listed Italian firms over the period 2008-2016. The analysis confirms a positive impact of the reform: we estimate an instant reform effect on the percentage of female directors of 17 percentage points and a follow-up effect of 11percentage points. The entry of new women pursuant to the law has also contributed to affect other board characteristics, lowering the average age, increasing the diversity in terms of age and professional background, increasing the level of education and the percentage of female interlockers. As for the impact on firms performance, results are not significant when static models are used. Differently, when a dynamic model is considered, female representation is estimated to yield a positive effect on different measures of performance when it exceeds a certain threshold, ranging between about 17% and 20% of the board members, roughly equivalent to at least two seats held by women, given that the average board size over the sample period is around ten members. This evidence supports the idea underpinning the critical mass theory, i.e., the hypothesis that women may influence board decisions and consequently firm performance when a minimum weight is achieved.  

Giovanni S.F. Bruno - Bocconi University(
Angela Ciavarella - Consob, Research Department, Economic Research Unit (
Nadia Linciano - Consob, Research Department, Economic Research Unit (

We thank Magda Bianco, Stefano Bozzi and an anonymous referee for useful comments. We also thank Regina Opaleva and all the participants to the X Portuguese Finance Conference for useful comments. We thank Eugenia Della Libera for research assistance. Any mistake remains, of course, our sole responsibility. Opinions expressed in this paper are exclusively the authors' and do not necessarily reflect those of Consob. 


JEL Classifications: G30, G38, K38.

ISSN 2281-1915 [online]