Is the Nomination Committee a Way to Promote Board Gender Diversity?
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Gender diversity in the boardroom is becoming more and more important. As a result, a gender quota has been adopted in many countries to increase the representation of women in higher positions, such as the board of directors. However, women continue to remain underrepresented on boards of directors. As a result, it is important to investigate proactive steps, such as establishing nomination committees, to increase the number of female board directors. This paper examines the effect of the nomination committee’s existence and composition on board gender diversity by using panel data from different listed firms in Europe from 2008 until 2020. With the help of a random-effects regression, two hypotheses are tested. Empirical evidence shows that board gender diversity is higher for firms with a nomination committee than those without a nomination committee. Furthermore, the results show that women on the nomination committee are likely to favour selecting women candidates for the board, leading to more board gender diversity. Overall, our results raise awareness of the importance of the nomination committee on board gender diversity and contribute to the literature by providing the groundwork for future research. This study is the first of its kind, by using a multi-country analysis. Keywords: corporate governance, board composition, board gender diversity, board committees, nomination committee, Europe
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