| Abstract: |
In 2017, “The Big Three” institutional investors launched campaigns to
increase gender diversity on corporate boards. We estimate that their
campaigns led American corporations to add at least 2.5 times as many female
directors in 2019 as they had in 2016. Firms increased diversity by
identifying candidates beyond managers’ existing networks and by placing less
emphasis on candidates’ executive experience. Firms also promoted more female
directors to key board positions, indicating firms’ responses went beyond
tokenism. Our results highlight index investors’ ability to effectuate
broad-based governance changes and the important impact of investor buy-in in
increasing corporate-leadership diversity. |