Gender diversity, Labour in the Boardroom, and Gender Quotas

This study investigates the novel question of whether employee representation on boards of directors has a positive effect on gender diversity on boards, and possible interaction effects with gender quotas. We exploit rich, newly assembled board–director matched panel data for Norway and Germany, which contain unique information on whether a director represents shareholders or employees during the period around 2008, when a Norwegian board gender quota came into effect. We present two novel results. First, we find a positive impact of employee representation before the gender quota reform on gender diversity in both Norway and Germany (2002–2009). Second, although overall the Norwegian gender quota has increased the probability of a director being female, the effect through employee representation has decreased since the announcement and implementation of the gender quota reform. We discuss potential mechanisms and implications for the design of gender quotas.