Diversitet i danske bestyrelser: Analyse af effekten af kvindelige bestyrelsesmedlemmer i danske børsnoterede virksomheder

Kimmie Lützhöft

Student thesis: Master thesis


The purpose of this thesis is to explore the effects of board diversity on the companies‟ financial performance both theoretically and through an analysis of Danish publicly listed companies. In order to clarify the effects of having diversified boards, a regression and correlation analysis and a comparison of means is carried out on data consisting of the composition of the Boards of Directors and the financial performance of 162 publicly listed companies in Denmark using average values for the years 2003, 2005, and 2007. The results of the analysis indicate that there are significant positive effects of having a diverse board, in the sense that the class of companies with female board members, and specifically the companies with more than one female member on the Board of Directors, outperform the companies without board diversity. Additionally, the calculated variable „share of female board members‟ correlates positively with firm financial performance and helps explain a significant amount of the variation in some of the financial performance indicators, such as ROE. There are multiple explanations as to why the diversity of the boards can lead to enhanced firm financial performance. These explanations include a broader base of knowledge, a larger pool of potential board members from which to recruit, and positive effects throughout the organization of having a Board of Directors that reflects the composition of all employees. Stakeholder management and responsible investments are another reason to consider the beneficial effects of board diversity. Barriers and obstacles for female board members persist because of prejudice and structural division of the labor market. A “glass ceiling effect” prevents women from reaching the very top level of the companies, and difficulties achieving a “work-life balance” are larger for women than for men because women still spend more time on domestic and family related chores and activities. In order to achieve an equal representation of male and female board members, in Denmark as well as in the European Union, soft law such as mainstreaming and guidelines that encourage the companies to appoint female board members has been implemented. In Norway, quotas have been in effect since 2006 resulting in a representation of female board members of nearly 40 %. Whether or not quotas are necessary to ensure diversity of the Danish boards depends on to which degree the rights of the shareholders can be limited when it comes to appointing board members. Furthermore, there are both positive and negative effects of implementing affirmative action; the positive effects are the immediate achievements of equal representation of male and female board members while some of the negative effects might include the way the new female board members are conceived. But performance wise there are no reasons not to have a much larger share of females on the Boards of Directors.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2009
Number of pages178