Women in boardrooms and financial performance of firms in Poland

Gender diversity became one of the “hot topics” in recent years ([Richard et al. 2004], [Campbell & Minguez-Vera 2008], [Carter et al. 2010], [Joecks et al. 2012] among others). The phenomenon of the gender and ethnic diversity of corporate boards encompasses at least two significant, and interrelated, propositions. The first viewpoint holds that those competent women and ethnic minorities with the human capital, external networks, information, and other characteristics of importance to the corporation deserve opportunities to serve on corporate boards and in upper management. The second proposition suggests that gender and ethnic diversity of directors results in better governance which causes the business to be more profitable. Karen J. Curtin, a former executive vice president of Bank of America, describes the interaction of the two propositions of board diversity in the following statement, “There is real debate between those who think we should be more diverse because it is the right thing to do and those who think we should be more diverse because it actually enhances share-holder value. Unless we get the second point across and people believe it, we’re only going to have tokenism” (Brancato & Patterson, 1999).

Improving the gender balance in company boardrooms, the European Union Commission proposed legislation in 2012 with the aim of attaining a 40% objective of the under-represented sex in non-executive board-member positions in publicly listed companies, with the exception of small and medium enterprises. In November 2012, boards are dominated by one gender: 85% of non-executive board members and 91.1% of executive board members are men, while women make up 15% and 8.9% respectively. In three years from October 2010 to October 2013 the share of women on boards increased in 22 of the 28 EU member states. The biggest increase was observed in France 17.4 percentage points (pp), Slovenia 11.8pp, the Netherlands 10.2pp and Germany 8.8pp. While in Romania it decreased by 13.5pp, in Hungary by 2.3pp, in Czech Republic by 1pp. In 2013 the average share of women on boards EU-28 was 17.8% but in Poland this share equaled 12.3% (in Finland and France nearly 30%, and in Latvia - 29%).

The aim of research is an analysis of the share of women in companies listed on The Warsaw Stock Exchange in the years 2010-2014, and an investigation of whether it influences the financial performance of firms.