Finance Research Letters 46 (2022) 102798

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Finance Research Letters

journal homepage: www.elsevier.com/locate/frl

The trends and determinants of board gender and age diversities

Mauro Oliveira *, Shage Zhang
Trinity University, Michael Neidorff School of Business, One Trinity Place, San Antonio, TX 78212, United States

A R T I C L E I N F O A B S T R A C T

JEL classification: We investigate trends and determinants of board gender and age diversities using a sample of
G34 8,590 firms for 20 years. Gender diversity and the average age of boards increased, while age
Keywords: diversity decreased in this period. We find that larger, older firms tend to have more gender
Board diversity diversity but less age diversity. More board independence is related to higher gender diversity,
Age diversity of board while more firm complexity is associated with less age diversity. For younger (older) boards, more
Gender diversity of board
female directors are associated with less (more) age diversity. We also find that female directors
Board of directors
in older boards generate value for the firm.

1. Introduction

Diversity in the board of directors is frequently mentioned in the press, with increasing regulatory consequences for US firms. For
example, California approved board gender quotas for firms headquartered in that state in 2018 (California Senate Bill 826). Prior
studies look into board gender, skills, age and race diversities and their impact on firm performance and governance.1 In this paper we
offer three main contributions that complement this literature. First, we report general trends in gender and age diversity from 2000 to
2020 using a very large sample of US firms. Second, we identify board and firm characteristics associated with gender and age di­
versities. Lastly, we uncover connections between age and gender diversities.
Using data from BoardEx for 8,590 US public firms from 2000 to 2020, we find an upward trend in gender diversity during this
period for firms of all sizes. Among the largest firms (1st quartile based on total assets), the average percentage of females on the board
increased from 10% to 28%. Societal pressure and larger representation of females in top management positions may have contributed
to this trend. Meanwhile, the average age of directors has also gone up. However, age diversity among directors on the same board has
decreased. Board size stays relatively constant after 2005, and we find that firms were substituting younger male by older male di­
rectors, as well as substituting male by female directors.
We then investigate the determinants of board gender diversity using multivariate models. Hillman et al. (2007) examine the 950
largest firms between 1990 and 2003 and find that firm size and being in industries with large female employment increase the
likelihood of females on the board. They argue that larger organizations are expected to respond more to societal pressures since they
are more visible and under the most scrutiny. We construct a significantly larger and more inclusive sample than what is used in prior
studies, aiming to generate more comprehensive conclusions. We verify Hillman et al. (2007)’s findings, and also provide new evi­
dence that the female representation is positively associated with the degree of board independence but negatively associated with the
average age of the board.

* Corresponding author.
E-mail address: Moliveir@trinity.edu (M. Oliveira).
1
E.g., Adams and Ferreira (2009), Carter, D’Souza, Simkins and Simpson (2010), Ahern and Dittmar (2012), Adams, Akyol and Verwijmeren
(2018), Bernile, Bhagwat and Yonker (2018).

https://doi.org/10.1016/j.frl.2022.102798
Received 15 January 2022; Received in revised form 16 February 2022; Accepted 14 March 2022
Available online 15 March 2022
1544-6123/© 2022 Elsevier Inc. All rights reserved.
M. Oliveira and S. Zhang Finance Research Letters 46 (2022) 102798

Finally, we examine the determinants of age diversity in boards. Age is a proxy for life and professional experience, as well as higher
risk aversion and conservatism (e.g., Platt and Platt (2012)). Previous researchers find evidence that age diversity impacts firm per­
formance (e.g., Kim and Lim (2010), Ali et al. (2014)). We contribute to this literature by examining the determinants of board age
diversity and its connections with gender diversity. We find that larger, older firms with more R&D, i.e., more complex firms that
perhaps require more monitoring, have older boards with less age diversity, most likely for the need of experience. While controlling
for firm size, larger board size is associated with more age diversity but younger average director age. We also find that not all firms
thrive to achieve both gender and age diversity, often times, one appears to substitute the other. For example, among firms whose
average director age is below sample average (younger boards), higher female director representation is associated with less age
diversity. However, among firms with older boards, age diversity seems to complement gender diversity and they appear to be
positively associated with each other. Using interactions between gender diversity and age, we also find that the presence of female
directors in older boards can add value to the firm.
In this type of research, the challenge is that the composition of the board is endogenously determined by internal governance
mechanisms, perhaps with simultaneous or time-dependent decisions. Although we are not interested in identifying direction of
causality, it is still possible that gender or age diversities are associated with omitted unobservable variables. We try to mitigate these
concerns by using fixed effects and a dynamic panel system with GMM estimator (GMM, hereafter). Consequently, we are able to
uncover several spurious relationships previously identified as valid in OLS models.

2. Data

We obtain information on directors from BoardEx database from 2000 to 2020. We use Compustat for firms’ financial data. Table 1
reports the summary statistics. Our total sample has 714,056 firm-year-directors with 72,027 individual directors, covering 8,590
firms. Panel B shows board characteristics. In line with previous literature (e.g., Adams and Ferreira (2009)), the mean (median)
fraction of female directors is 11% (10%). The mean and median of the average age of directors is 61 years, with the age range among
directors on the same board being 23 years on average in our sample, so age diversity is not particularly unusual for boards. Panel C of
Table 1 shows the correlations between the variables used in the proposed regressions. Panel D shows a contrast between our sample
and a usual RiskMetrics/ISS sample. Our sample has 2.7 times more firms. They are smaller, have smaller boards, and less female
directors on average. However, boards’ age measurements are similar between the two samples. Appendix A lists the variable
definitions.

3. Results

3.1. Trend analysis

Fig. 1 shows trends for gender, age diversity and board size from 2000 to 2020. We are interested in differences between firms of
different sizes and hence sorted them into quartiles for each year. Panel A shows that larger firms consistently have more women on the
board, with all four groups showing increasing trend in female representation over time, especially after 2013. We conjecture that
societal pressures for gender equity, larger representation of females in top management positions as they progress in their man­
agement careers, and perhaps firms acting in anticipation of future regulations, are the reasons for this increase.2 Panel B confirms the
findings of Linck et al. (2008) that board sizes increased until 2004–2005, primarily because of Sarbanes-Oxley Act, and since then
remained approximately constant. Thus, women are mostly substituting male directors, instead of increasing board sizes.
In terms of age, Panel C indicates that larger firms have less age diverse boards and boards are getting less age diverse for all size
groups. In the meanwhile, boards are getting older on average across all size groups (Panel D). Among the largest firms, boards’ mean
age increased by 4.5 years in the period, i.e., a 7.61% increase from the initial mean age in 2000. Panels E and F show an increasing
trend in mean ages for both female and male directors. However, comparing Panels D and E, the mean age of females is always below
the total mean age of the board for each size quartile . Thus, firms are substituting younger male directors by older males, while
concurrently substituting males by females.3 In sum, firms have been increasing gender diversity, increasing board average age, and
decreasing age diversity from 2000 to 2020.

3.2. Determinants of gender diversity

We use the following multivariate model to examine factors related to board gender diversity:
∑
n
%Female Directorsi,t = α + βj Xi,t + ui + μt + εi,t (1)
j=1

2
To the best of our knowledge, the only regulation mandating women participation in boards during this period is the 2018 California gender
quota. In our sample, only 16 % of firms are headquartered in California in 2018-2020. We verify the increase in female participation across several
states, not only from California.
3
Another possibility is that male directors are staying longer in their directorships. However, a univariate analysis indicates that the mean male
tenure increased by only 1.03 years in the period, which is insufficient to explain the observed increase in directors’ mean age.

2
 Table 1

M. Oliveira and S. Zhang

Summary statistics.
Panel A - Sample Characteristics

Total Sample

No. of Observations (Firm-years-directors) 714,056

No. of Observations (Firm-years) 91,900
No. of Firms 8,590
No. of Directors 72,027

Panel B - Sample Summary Statistics

N Mean Std. Dev. Min p25 Median p75 Max

Firm Characteristics:
Firm Size 91,900 6.36 2.28 –0.48 4.85 6.46 7.89 12.60
Firm Age 91,900 18.5 12.5 2 8 15 27 52
Market-to-Book 85,409 1.76 2.34 0.08 0.67 1.09 1.90 30.71
R&D Intensity 91,900 0.06 0.14 0 0 0 0.04 1.37
ROA 91,900 –0.08 0.42 –4.64 –0.04 0.01 0.06 0.38
Tobin’s Q 89,167 2.59 3.20 0.30 1.11 1.57 2.69 31.96
Board Characteristics:
Board Size 91,900 7.61 2.90 3 6 7 9 35
%Female Directors 91,900 10.6 11.8 0 0 10.0 18.2 100
%Independent Directors 91,900 81.2 20.3 0 71.4 85.7 100 100
CEO-Chair Duality 91,900 0.30 0.46 0 0 0 1 1
Age (Mean) 91,900 60.9 5.59 32.0 57.5 61.3 64.6 88.7
Age (Median) 91,900 61.1 6.21 30 58 62 65 93
3

Age Range 91,900 23.2 8.69 1 17 23 29 73

Age Diversity (CV) 91,900 0.14 0.05 0.03 0.10 0.13 0.17 0.32
Age Diversity (LnSD) 91,900 2.06 0.38 0.55 1.83 2.09 2.33 2.86
Director Characteristics:
Age 714,056 61.0 9.7 20 55 62 68 100
Tenure 714,056 6.8 6.8 0 2 5 10 64
Committee Member 714,056 0.89 0.31 0 1 1 1 1

Panel C - Correlations

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

(1) Firm Size 1

(2) Firm Age 0.29 1
(3) Market-to-Book –0.36 –0.12 1

Finance Research Letters 46 (2022) 102798

(4) R&D Intensity –0.40 –0.16 0.43 1
(5) ROA 0.43 0.17 –0.48 –0.60 1
(6) Board Size 0.60 0.27 –0.19 –0.16 0.16 1
(7)%Female Directors 0.34 0.21 –0.04 –0.08 0.10 0.29 1
(8)%Independent Directors 0.14 0.11 –0.05 0.02 0.07 0.02 0.18 1
(9) CEO-Chair Duality 0.20 0.19 –0.03 –0.09 0.08 0.22 0.04 –0.12 1
(10) Age (Mean) 0.18 0.35 –0.09 –0.09 0.10 0.09 0.06 0.16 0.03 1
(11) Age (Median) 0.17 0.33 –0.09 –0.09 0.10 0.10 0.06 0.14 0.03 0.93 1
(12) Age Diversity (CV) –0.19 –0.16 0.05 0.03 –0.07 –0.08 –0.11 –0.17 –0.08 –0.33 –0.28 1
(13) Age Diversity (LnSD) –0.11 –0.07 0.02 0.01 –0.04 0.01 –0.07 –0.12 –0.06 –0.08 –0.05 0.93 1

Panel D - Samples - Comparison of Means

(continued on next page)

 M. Oliveira and S. Zhang
Table 1 (continued )
Boardex RiskMetrics(ISS) Difference

No. of Firms 8,590 3,102 5,488

No. of firm-years 91,900 27,847 64,053
Firm Characteristics:
Firm Size 6.36 8.06 –1.69***
Firm Age 18.5 25.8 –7.30***
Market-to-Book 1.76 1.53 0.22***
R&D Intensity 0.06 0.02 0.03***
ROA − 0.08 0.04 –0.13***
Tobin’s Q 2.59 2.36 0.23***
Board Characteristics:
4

Board Size 7.61 9.39 –1.78***

%Female Directors 10.6 13.8 –3.14***
%Independent Directors 81.2 76.8 4.36***
CEO-Chair Duality 0.30 0.59 –0.29***
Age (Mean) 60.9 61.5 –0.62***
Age (Median) 61.1 61.8 –0.65***
Age Range 23.2 23.3 –0.05
Age Diversity (CV) 0.14 0.13 0.01***
Age Diversity (LnSD) 2.06 2.00 0.06***

Notes: Variables are defined in Appendix A. All ratios are Winsorized at 1% and 99%.

Finance Research Letters 46 (2022) 102798

M. Oliveira and S. Zhang Finance Research Letters 46 (2022) 102798

Fig. 1. Board Diversity Trends.

Notes: This figure shows the trends of gender and age in boards for the period 2000–2020. The firms are sorted into quartiles for each year, based on
Firm Size. All variables are defined in Appendix A.

%Female Directors is the number of female directors in the board divided by the total number of directors in percentage. The firm
identifier is i and t represents the year. Xi,t denotes the factors of interest (firm characteristics and board composition)4; ui and μt
controls for industry and year fixed effects; and εi,t is a random error term.
Table 2 reports the regression estimates. Columns 1 and 2 show results for OLS with fixed effects. Column 3 shows results using
GMM.5 The results show that firm size and age are associated with more female representation on the board, confirming Hillman et al.
(2007)’s findings. These are proxies for firm complexity, and are expected to be positively related to monitoring and advising functions
of the board (Linck et al. (2008), and Boone et al. (2007)). Next, the coefficients of Board Size are positive and statistically significant,
indicating that larger boards are associated with more female participation after controlling for firm size. Additionally, we find that
past performance (ROA), leverage, and CEO-Chair Duality are not significant factors. We also confirm that more female representation
is associated with lower mean age of directors.
In our sample, 90% of the women are independent directors, compared to 80% of male directors. We expect and obtain a positive
relationship between%Female Directors and%Independent Directors. Consequently, we would also expect a negative relationship

4
We follow Linck et al. (2008) and Hillman et al. (2007) to identify the most relevant factors of interest.
5
GMM is a one-step Arellano-Bond regression with lagged dependent variable and dynamic GMM estimator. We use one period lag instruments
for all right-hand side variables, except the dummies, and two and all further lags for the lagged dependent variable (Adams and Ferreira (2009)).
Results are qualitatively similar if we use specifications of lags from Sila et al. (2016). We also test OLS and GMM specifications using data from
every third year because of a possible persistence of board characteristics, obtaining qualitatively similar results.

5
M. Oliveira and S. Zhang Finance Research Letters 46 (2022) 102798

Table 2
Determinants of female directors on the board.
%Female Directors %Female Directors %Female Directors
(1) (2) (3)

Firm Size 0.0108*** 0.0107*** 0.0041***

(15.72) (14.97) (3.42)
Firm Age 0.0012*** 0.0011*** 0.0007***
(13.08) (11.62) (3.52)
Market-to-Book 0.0006** 0.0006** –0.0003
(2.09) (2.01) (–0.76)
R&D Intensity 0.0200*** 0.0205*** 0.0026
(3.96) (3.89) (0.43)
ROAt-1 0.0006 0.0006 –0.0003
(0.49) (0.47) (–0.23)
Board Size 0.0025*** 0.0024*** 0.0046***
(8.27) (7.90) (12.01)
%Independent Directors 0.0521*** 0.0516*** 0.0507***
(10.33) (10.23) (6.63)
CEO-Chairman Duality –0.0018 –0.0018 –0.0014
(–1.42) (–1.42) (–0.88)
Board Age (Mean) –0.0024*** –0.0023*** –0.0039***
(–12.88) (–12.61) (–9.40)
%Female Directorst-1 0.825***
(64.13)
Observations 85,409 85,409 78,825
R-squared 0.246 0.246 –
Industry FE No Yes Yes
Year FE Yes Yes Yes
Arellano-Bond 1-step No No Yes
with GMM estimator

Notes: All variables are defined in Appendix A. Heteroskedastic-robust t-statistics are in parentheses. The symbols ***, ** and * indicate significance
levels at the 1%, 5%, and 10% levels based on p-values.

between female representation and the costs of monitoring and advising, measured by Market-to-Book and R&D Intensity Linck et al.
(2008). argues that, as these costs increase, firms will use less independent directors. These relationships are not confirmed in the GMM
specification. Thus, we cannot conclude that more costs of monitoring and advising are associated with fewer females in the board.
Similarly, we find that stock volatility (firm risk), is not associated with female representation on the board, confirming Sila et al.
(2016) (not tabulated in the interest of brevity).

3.3. Determinants of age diversity

We use the same model in Eq. (1), but instead our dependent variable is Age Diversity, measured by the coefficient of variation of
directors’ age in each year. We also verify our results using the natural logarithm of the standard deviation of directors’ age for
robustness.
Table 3 shows the results. We expect that, as firms’ complexity increases, the mean age of boards will increase and age diversity will
decrease, since firms may prefer to hire and keep more experienced board members. The regressions confirm that age diversity is
negatively associated with Firm Size and Firm Age. Age diversity is also negatively associated with R&D Intensity. However, coefficients
for past performance and market-to-book ratio are not statistically significant. Thus, we cannot reach a definitive conclusion for age
diversity and costs of monitoring.
The results also show that larger board sizes are associated with more age diversity, when controlling for firm size and firm age.
However,%Independent Directors and CEO-Chair Duality are negatively associated with age diversity. In unreported additional analysis,
we find that larger boards are associated with lower mean age of directors, while independent directors and CEO-chair duality are
associated with higher mean ages for all size quartiles. These results together indicate that larger boards are usually younger and more
age diverse, while more independent boards are usually older and less age diverse.
Finally, although female directors are younger, their presence in boards does not increase or decrease age diversity on average (see
coefficients of%Female Directors in Table 3). We further examine if gender diversity interacts with age diversity in different ways for
different firms. We create two subsamples, younger and older boards, using the median of boards’ Age (Mean) variable as the threshold
(Table 4). We find that for younger (older) boards, more female directors are associated with less (more) age diversity.

3.4. Interaction of gender, age and Tobin’s Q

Next, based on the results for older boards in Table 4, we investigate the effect of the interaction of gender and age of directors on
firm value using Tobin’s Q on a model specification commonly used in previous literature (e.g., Adams and Ferreira (2009)). Table 5
shows the results. In Columns 1 thru 3 we use the variable Female Director, which equals one if there is at least one female on the board

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M. Oliveira and S. Zhang Finance Research Letters 46 (2022) 102798

Table 3
Determinants of age diversity of board of directors.
Age Diversity Age Diversity Age Diversity Age Diversity Age Diversity Age Diversity
(CV) (LnSD) (CV) (LnSD) (CV) (LnSD)
(1) (2) (3) (4) (5) (6)

Firm Size –0.0050*** –0.0283*** –0.0049*** –0.0280*** –0.0058*** –0.0487***

(–14.39) (–11.41) (–13.50) (–10.70) (–9.07) (–9.97)
Firm Age –0.0006*** –0.0021*** –0.0006*** –0.0020*** –0.0003*** –0.0023***
(–13.88) (–7.02) (–13.49) (–6.60) (–2.69) (–3.04)
R&D Intensity –0.0136*** –0.0656*** –0.0129*** –0.0611*** –0.0096*** –0.0781***
(–5.09) (–3.30) (–4.60) (–2.91) (–3.36) (–3.68)
ROAt-1 0.0007 0.0108** 0.0006 0.0100** –0.0003 0.0055
(0.98) (2.15) (0.80) (1.97) (–0.35) (1.05)
Board Size 0.0032*** 0.0309*** 0.0033*** 0.0312*** 0.0060*** 0.0534***
(19.62) (25.60) (19.78) (25.62) (28.60) (34.28)
%Independent –0.0336*** –0.174*** –0.0333*** –0.173*** –0.0263*** –0.139***
Directors
(–12.37) (–9.47) (–12.22) (–9.38) (–5.89) (–4.17)
CEO-Chairman Duality –0.0043*** –0.0202*** –0.0044*** –0.0204*** –0.0021*** –0.0119**
(–6.38) (–4.05) (–6.47) (–4.09) (–3.06) (–2.30)
%Female Directors –0.0002 –0.0348 –0.0003 –0.034 0.0139** 0.0298
(–0.04) (–1.14) (–0.08) (–1.10) (2.128) (0.60)
Age Diversity (CV)t-1 0.812***
(67.00)
Age Diversity (LnSD)t-1 0.786***
(55.79)
Observations 91,900 91,900 91,900 91,900 84,888 84,888
R-squared 0.058 0.042 0.058 0.042 – –
Industry FE No No Yes Yes Yes Yes
Year FE Yes Yes Yes Yes Yes Yes
Arellano-Bond 1-step No No No No Yes Yes
with GMM estimator

Notes: All variables are defined in Appendix A. Heteroskedastic-robust t-statistics are in parentheses. The symbols ***, ** and * indicate significance
levels at the 1%, 5%, and 10% levels based on p-values.

Table 4
Determinants of age diversity of board of directors for older vs. younger boards.
Younger Boards Older Boards

Age Diversity (CV) Age Diversity (LnSD) Age Diversity (CV) Age Diversity (LnSD)
(1) (2) (3) (4)

Firm Size –0.0046*** –0.0227*** –0.0050*** –0.0326***

(–9.12) (–6.49) (–10.06) (–8.19)
Firm Age –0.0008*** –0.0029*** –0.0002*** –0.0008**
(–11.18) (–6.18) (–3.54) (–1.97)
R&D Intensity –0.0118*** –0.0488* –0.0148*** –0.0710**
(–3.25) (–1.79) (–3.32) (–2.17)
ROAt-1 0.0005 0.0077 0.0013 0.0143*
(0.58) (1.19) (1.13) (1.75)
Board Size 0.0029*** 0.0278*** 0.0037*** 0.0348***
(12.31) (17.10) (15.90) (18.99)
%Female Directors –0.0298*** –0.216*** 0.0314*** 0.174***
(–5.11) (–5.34) (5.44) (3.73)
%Independent Directors –0.0319*** –0.126*** –0.0295*** –0.223***
(–8.75) (–5.42) (–7.30) (–7.34)
CEO-Chair Duality –0.0053*** –0.0215*** –0.0030*** –0.0184**
(–5.43) (–3.21) (–3.23) (–2.54)
Observations 45,934 45,934 45,966 45,966
R-squared 0.078 0.040 0.059 0.055
Industry FE Yes Yes Yes Yes
Year FE Yes Yes Yes Yes

Notes: All variables are defined in Appendix A. Heteroskedastic-robust t-statistics are in parentheses. The symbols ***, ** and * indicate significance
levels at the 1%, 5%, and 10% levels based on p-values.

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M. Oliveira and S. Zhang Finance Research Letters 46 (2022) 102798

Table 5
Effect of interaction of gender diversity with age on Tobin’s Q.
Tobin’s Q Tobin’s Q Tobin’s Q Tobin’s Q Tobin’s Q Tobin’s Q
(1) (2) (3) (4) (5) (6)

Female Director*Mean Age 0.0186*** 0.0252*** 0.352**

(2.79) (3.58) (2.30)
Female Director –1.038** –1.487*** –20.78**
(–2.55) (–3.44) (–2.18)
%Female Directors*Mean Age 0.0675** 0.104*** 1.241*
(2.17) (3.06) (1.84)
%Female Directors –3.540* –6.030*** –67.10
(–1.87) (–2.90) (–1.61)
Mean Age –0.0121** –0.0076 –0.0496 –0.0092* –0.0052 0.0029
(–2.17) (–1.22) (–0.60) (–1.72) (–0.85) (0.037)
Firm Size –0.598*** –0.766*** –0.362* –0.599*** –0.765*** –0.455**
(–21.39) (–17.87) (–1.83) (–21.49) (–17.89) (–2.32)
Board Size –0.0002 –0.0138* 0.0118 0.0021 –0.0130* –0.0057
(–0.02) (–1.75) (0.23) (0.30) (–1.67) (–0.25)
Independent Directors –0.155 –0.119 –0.199 –0.172 –0.128 –0.351
(–1.16) (–0.77) (–0.28) (–1.29) (–0.83) (–0.51)
CEO-Chair Duality 0.0621** 0.0455 0.0609 0.0629** 0.0457 0.0879
(1.96) (1.36) (0.66) (1.99) (1.37) (0.98)
Tobin’s Qt-1 0.0012 0.0011
(1.63) (1.47)
Observations 90,512 90,512 85,865 90,512 90,512 85,865
R-squared 0.0503 0.0515 – 0.0502 0.0514 –
Industry FE Yes No Yes Yes No Yes
Firm FE No Yes No No Yes No
Year FE Yes Yes Yes Yes Yes Yes
Arellano-Bond 1-step No No Yes No No Yes
with GMM estimator

Notes: All variables are defined in Appendix A. Heteroskedastic-robust t-statistics are in parentheses. The symbols ***, ** and * indicate significance
levels at the 1%, 5%, and 10% levels based on p-values.

and zero otherwise. The variable of interest is the interaction term Female Director*Mean Age. Its coefficients are statistically signifi­
cant, suggesting that the presence of female directors will have an increasing impact on firm Tobin’s Q in older boards.6 The combined
marginal effect of a female director is positive in every specification.7 Together with the previous results that gender diversity tends to
increase age diversity in older boards, we conclude that diversity along multiple dimensions will enhance board function and firm
value, especially when the board is more experienced. This result is in line with the conclusion of Adams and Ferreira (2009). They find
that female directors have a positive impact on corporate governance, but do not find a positive link to firm performance or value. They
note that this relationship could be more complex, as shown by our interaction test.

4. Conclusion

This paper extends the literature on diversity of board of directors by studying trends and determinants of board gender and age
diversities. We find that gender diversity increased during this period, with a sharp growth in the last five years. Also, the mean age of
boards increased, but age diversity decreased. The statistics show that female directors are younger on average, and since board size
was not increasing, firms were substituting male by female directors, and young male directors by older ones.
We also find that larger, older firms, and firms with more independent directors are associated with more women on the board,
which may be related to larger firms making changes in response to societal pressures and in anticipation of new regulation. We find
that more complex firms have older boards with less age diversity, and firms with larger boards have more age and gender diversity on
average. For younger (older) boards, more female directors are associated with less (more) age diversity. We also find that the presence
of female directors on older boards can generate value for the firms.

Declaration of Competing Interest

none

6
We also test the specifications using two-stage least square regressions with an instrumental variable, the median value of %Female Directors for
firms in the same industry and the same size quartile as the firm in focus, obtaining similar results. These are not shown for brevity.
7
For instance, using the coefficients from Column 1 and mean age of 61, the marginal increase in Tobin’s Q with the presence of a female is
0.0186*61 – 1.038 = 0.097. Since the mean Tobin’s Q is 2.59, we get an economically significant increase of 0.097*100/2.59 = 3.75% in Tobin’s Q.

8
M. Oliveira and S. Zhang Finance Research Letters 46 (2022) 102798

Appendix A. Variables Definition.

Variable Name Definition

Age Director age in years.
Age Diversity (CV) Coefficient of variation, standard deviation divided by the mean of the ages of board directors.
Age Diversity (LnSD) Natural logarithm of the standard deviation of the ages of board directors.
Age (Mean) Mean of the ages of board directors.
Age (Median) Median of the ages of board directors.
Age Range Higher director age minus lower director age.
Board Size Number of directors in the board.
CEO-Chair Duality Dummy variable that receives the value of one if the CEO is also the chairman/chairwoman of the board, or zero otherwise.
Committee Member Dummy variable that receives the value of one if the director is member to a committee, or zero otherwise.
%Female Directors Number of female directors in the board divided by the total number of directors (in percentage).
Female Director Dummy variable that receives the value of one if at least one director is female, or zero otherwise.
Firm Age Age of the firm in Compustat.
Firm Size Natural logarithm of total assets.
%Independent Number of independent directors in the board divided by the total number of directors (in percentage).
Directors
Market-to-Book Ratio of market value of assets to book value of assets. Market value of assets is calculated as the sum of the market value of outstanding
common equity, book value of long-term debt, book value of short-term debt and preferred stock minus deferred taxes and investment tax
credit.
ROA Net income divided by total assets.
R&D Intensity R&D expenditures divided by total assets.
Tenure Number of years in the board.
Tobin’s Q Ratio of firm market value to firm book value. Market value is calculated as the sum of the market value of outstanding common equity,
book value of long-term debt, book value of short-term debt and preferred stock minus deferred taxes and investment tax credit. Firm
book value is measured as the book value of common equity plus the book value of long-term debt, book value of short-term debt and
preferred stock minus deferred taxes and investment tax credit.

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