Women Directors and E&S Performance: Evidence from Board Gender Quotas

Using the natural experiment created by France's 2011 board gender-quota law, we find that the presence of women on boards increases firms’ environmental and social (E&S) performance. Our results are robust to controlling for several directors’ observable characteristics and proxies for values such as benevolence, universalism, and nonconformism. Since the passage of the law, firms are more likely to create an E&S committee. However, E&S committees are not the only channel through which the inclusion of women on boards drives E&S performance. After the quota law, women are increasingly serving as members and chairs of major committees. Our findings suggest that female directors have unique qualities, experiences, and preferences, which, in combination with their enhanced authority, enable them to steer firms toward more E&S oriented policies.