Journal of Law, Finance, and Accounting > Vol 7 > Issue 2

Diversity through Turnover: How to Overcome the Glacial Pace toward Board Diversity?

Wei Jiang, Asa Griggs Candler Professor of Finance, Goizueta Business School, Emory University, USA,
Suggested Citation
Wei Jiang (2023), "Diversity through Turnover: How to Overcome the Glacial Pace toward Board Diversity?", Journal of Law, Finance, and Accounting: Vol. 7: No. 2, pp 165-190.

Publication Date: 17 May 2023
© 2023 W. Jiang
Corporate finance,  Organizational behavior
JEL Codes: G34
Board diversityBoard turnoverproxy contest


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In this article:
Data and Sample Overview 
Determinants of Board Gender Diversity 
Why Is the Progress Slow? 


Based on a comprehensive database of corporate board directors, this study provides an overview of recent developments in the gender diversity of US corporate boards. Prior to 2009, women made up about 8% of the directors of US corporate boards. As of 2019, that proportion has since risen to 18% among public firms, while private firms have not witnessed notable improvement. This study highlights the general lack of board turnover—that is, board inertia resulting in incumbents enjoying long tenure—as a key factor in the slow adjustment. Proxy contests resulting from shareholder activism increase the odds that the boards will gain female directors by 32%, despite activist directors themselves being no more gender-diverse compared to new directors added in the absence of contests. This is because firms targeted by proxy contests double board turnover rates, allowing them to tap into a fresh pool of director candidates which is significantly more diverse than the incumbents.