Stock Returns, Board of Directors, Women, Fortune 250, Fama-French


Professor Vijay Gondhalekar


There has been an ongoing debate over women’s impact on corporations, specifically in top executive roles. This study looks at the stock price reaction to the appointment of the first female to the board of directors of Fortune 250 companies. Using the Fama-French three factor model we observed the abnormal stock price reaction that occurred when a company announced the first woman being appointed. Analysis revealed that although the initial stock price reaction was zero, the post-five year returns were statistically significantly positive. This is the first study to show that having a woman on a firm’s board of directors increases firm performance and adds value, suggesting that women should indeed have a place in top management in the business world.