The effect of shareholder litigation rights on female board representation: A quasi-natural experiment.

ABSTRACT: Employing as a quasi-natural experiment an unexpected judgment by the Ninth Circuit Court of Appeals that raised the difficulty of shareholder litigation, we explore the effect of shareholder litigation rights on board gender diversity. Our difference-in-difference estimates show that an exogenous reduction in shareholder litigation risk results in significantly less female board representation, a decline by 11.44% in particular. Our findings corroborate the view that strong shareholder litigation rights strengthen internal governance such as board oversight. Therefore, when shareholder litigation rights are weakened, there is a drop in board quality. Additionally, we document a decline in board independence and an increase in board size following the Ninth Circuit ruling, both of which ar

SUBMITTER: Chatjuthamard P 

PROVIDER: S-EPMC9491617 | biostudies-literature | 2022

REPOSITORIES: biostudies-literature