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The impact of the 2012 NZX listing rule change on board composition and company performance

The impact of the 2012 NZX listing rule change on board composition and company performance This study aims to examine the impact of December 2012, New Zealand (NZ) stock exchange operator listing rule change that introduced compulsory disclosure about gender diversity on NZ boards.Design/methodology/approachA quasi-natural experiment setting with a clearly identifiable exogenous event.FindingsThe rate of growth in female-held directorships increased significantly after the introduction of the new rule, resulting in, by 2016, the average female board representation being more than double what it had been in 2012. However, this paper finds no relationship between this response and company performance.Research limitations/implicationsThis study cannot attribute causality to the observed jump in female directorships following the 2012 listing rule change due to the absence of a control group of firms not subject to this change.Practical implicationsThe results are consistent with an efficient director appointment process in NZ.Originality/valueLow-key regulatory changes can have a significant impact on company behaviour. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Pacific Accounting Review Emerald Publishing

The impact of the 2012 NZX listing rule change on board composition and company performance

Pacific Accounting Review , Volume 32 (4): 20 – Dec 11, 2020

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0114-0582
DOI
10.1108/par-07-2019-0091
Publisher site
See Article on Publisher Site

Abstract

This study aims to examine the impact of December 2012, New Zealand (NZ) stock exchange operator listing rule change that introduced compulsory disclosure about gender diversity on NZ boards.Design/methodology/approachA quasi-natural experiment setting with a clearly identifiable exogenous event.FindingsThe rate of growth in female-held directorships increased significantly after the introduction of the new rule, resulting in, by 2016, the average female board representation being more than double what it had been in 2012. However, this paper finds no relationship between this response and company performance.Research limitations/implicationsThis study cannot attribute causality to the observed jump in female directorships following the 2012 listing rule change due to the absence of a control group of firms not subject to this change.Practical implicationsThe results are consistent with an efficient director appointment process in NZ.Originality/valueLow-key regulatory changes can have a significant impact on company behaviour.

Journal

Pacific Accounting ReviewEmerald Publishing

Published: Dec 11, 2020

Keywords: Firm performance; Female directors; Listing rules; G34; G38

References