Do board gender quotas affect firm value? Evidence from California Senate Bill No. 826

Daniel Greene, Vincent J. Intintoli, Kathleen M. Kahle

Research output: Contribution to journalArticlepeer-review

75 Scopus citations


We examine stock market reactions, direct costs of compliance, and board adjustments to California Senate Bill No. 826 (SB 826), the first mandated board gender diversity quota in the United States. Announcement returns average −1.2% and are robust to the use of multiple methodologies. Returns are more negative when the gap between the mandated number and the pre-SB 826 number of female directors is larger. These negative effects are less severe for firms with a greater supply of female candidates, and for those that can more easily replace male directors or attract female directors. For small firms, the annual direct cost of compliance through board expansion is non-trivial, representing 0.76% of market value. Following SB 826, firms significantly increase female board representation, and the increase is greater for firms in California than control firms in other states.

Original languageEnglish (US)
Article number101526
JournalJournal of Corporate Finance
StatePublished - Feb 2020


  • Boards of directors
  • Corporate governance
  • Female directors
  • Gender diversity
  • Gender quota
  • Regulation

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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