Market reactions to female director appointments onto JSE-listed company boards

Abstract

Societal imbalances in relation to gender is not a new discovery but rather a debate that has constantly prevailed. Females have consistently been associated with more traditional roles such as family and household responsibilites however, a business case exists that the inclusion of females onto coporate boards proves to be beneficial. The board of directors is responsible for value maximisation and research has shown that its’ composition can impact the value of firms as a whole and how they are perceived by the market. Research into African markets is minimal which is one of the gaps the study aimed to achieve in determining the reaction within South Africa. This study contrasted the markets reaction between males and females being appointed onto company boards. It also assessed whether there was a difference based on the role females were appointed into, such as executive or non-executive. In order to further assess the reaction, it was broken down into industry specific announcements and their reactions. The findings identified that there was a negative reaction towards females however, it was not statistically significant. The reaction differed to that of males, which may indicate that the Johannesburg Stock Exchange is not entirely efficient and may have a slight bias however, the cause was not determined within this study. It was also evident that companies had a preference for females in non-executive positions and less in executive positions. The reaction tended to differ amongst the industries but still remained largely negative