In 2018, California became the first state to require publicly held corporations with their principal executive offices in the state to have a minimum number of female directors.  Following this groundbreaking, and perhaps unconstitutional, law, academics have tried to assess the impacts, if any, of gender diversity on corporate performance.  See Acknowledging Potentially "Fatal" Flaws, Governor Signs Board Gender Quota Bill.

Recently, three academics, Vikram K. Nanda, Andrew K. Prevost, and Arun Upadhyay, examined gender diversity and executive pay practices, concluding that "gender diverse boards are associated with managers receiving more compensation in the form of debt-like pension fund contributions, thereby incentivizing managers to curb risk and enhance long-term firm viability".  Consistent with this finding, the authors also found that "the proportion of independent female directors has a significant positive effect on the bond credit rating, and similarly has a negative impact on the risk premium demanded by investors of the firm’s risky debt".  Their paper is available here.

"All Aboard: A California Tale of Gender Diversity"

Later this month, I will be serving as the moderator of a panel at the Society for Corporate Governance's 2019 National Conference in San Diego.  The panelists will be California Assembly Member Lorena Gonzales, CalSTRS Investment Officer Mary Morris, and Apache Corporation Director Amy Nelson.  Information concerning the conference is available here.