The Unintended Effect of Gender Quotas on Bank Performance: Director Busyness

Abstract: The adoption of corporate board quotas over the recent years in many European countries has been both remarkable and controversial. We ask how busyness of female directors on boards of financial institutions was affected by the adoption and analyze the consequences for the corporate performance. Examining a sample of 414 European financial institutions between 2009 and 2016 we find that the number of external appointments held by female directors increases after the introduction of quotas. We find no evidence that the new appointments lead female directors to shirk their responsibilities. We conclude that our findings do not support the concerns that gender quotas harm the quality of corporate governance in the financial sector.