The Effectiveness of Gender Diversity Reforms and the Impact of a Familial Culture: A Spillover Effect on Board Independence

This study examines the impact of board gender diversity reforms (i.e. voluntary and regulatory) on both their effectiveness in increasing independent female directors on boards and board independence in a sample of 41 countries (10,313 unique firms and 82,613 firm-year observations). In an initial analysis, we find that voluntary self-regulation via a comply-or-explain reform decreases the number of independent female directors on boards and board independence. However, after incorporating the moderating effect of national culture, we find that such comply-or-explain reforms are ineffective only in countries where the inclusion/role of women in labour markets is limited (i.e. familial culture). By contrast, quota reforms boost the appointment of independent female directors and board independence despite the cultural setting, signifying positive actions towards good corporate governance practices.