ESSEC - Amundi Chair on Asset & Risk Management
"Does Women's Vote on Boards Matter for ESG?"
September 28, 2023
Over the past decade, there has been increasing evidence that women are underrepresented on boards, in particular in the asset management industry. The finance literature has shown that women on boards behave differently than men by allocating more effort to monitoring, assigning a higher value to benevolence and universalism, being less power-oriented, having better skills in human resources and sustainability, being more ethical and transformational, and being more concerned about workforce reductions. With the increasing concern about ESG related issues in the investment industry, in particular with respect to the environmental (E) and social (S) pillars, the question of the impact of women representation on boards is highly relevant. Are the gender differences between women and men reflected in their voting behavior and the decisions on ESG issues?
16.30 - 17.15: "The Voting Behavior of Women-Led Mutual Funds"
by Alberta DI GIULI, ESCP Business School
17.15 - 18.00: "Women Directors and E&S Performance: Evidence from Board Gender Quotas"
by Edith GINGLINGER, Université Paris Dauphine- PSL
The first paper presented by Albert di Giuli (ESCP Business School) explores the impact of women representation on the voting behavior of mutual funds by examining whether gender differences in investment teams of mutual funds translate into different voting behaviors. Focusing on shareholder and management proposals, the authors examine whether women-led mutual funds vote differently than other funds. Based on their analysis, women-led mutual funds are significantly more likely to support ES or E and S only proposals. In addition, women-led mutual funds are found to be more likely to exhibit in-group peer favoritism and vote with management when the firm is managed by women CEO. Finally, women-led mutual funds are more likely to support female candidates during board elections when the fraction of female directors on the board is low.
A second paper presented by Edith Ginglinger (Université Paris Dauphine) uses a natural experiment on board gender quota in France to examine how the presence of women on boards impacts firms’ ES performance. According to the authors, the introduction of board gender quotas in France improved the ES performance of French firms relative to a matched sample of US firms or firms listed in Paris but that were not subject to the quota law. They find that women have a greater probability to be part or to chair ES, audit, compensation or nomination committees after the adoption of the quota law. Finally, boards have become more ES oriented following the increase in women representation on boards.
Overall, these two papers provide new evidence on the impact of gender differences on boards’ behavior.