Gender differences in non-executive director boardroom turnover

Abstract

Despite the considerable contributions of female non-executive directors (NEDs) towards firm outcomes, female NEDs seem to exhibit substantially higher boardroom turnover rates compared to their male counterparts. Consequently, it is urgent to investigate the factors that contribute to the retention or departure of female NEDs from the board. Using a large monthly panel data set of 4,662 NEDs at 5,717 publicly listed firms in the UK, this study investigates gender differences in turnover rates among NEDs. By performing accelerated failure time models using the Weibull distribution and two sample t tests, this study finds evidence of increased turnover rates of female NEDs compared to male NEDs. However, this study also finds that female NEDs are less likely to turnover from the board compared to male NEDs when there are more female NEDs on the board, when firm size and profitability increase, and in female dominated industries. Besides, the presence of social capital reduces the likelihood of turnover among female NEDs. The findings therefore suggest that fostering an inclusive and collaborative boardroom environment, comprising of an equal ratio of men and women, facilitates the retention of female NEDs.