The Market Reaction to the Appointment of Women on Corporate Boards: Evidence from the Italian Listed Companies

During the 2012-2016 period, a large number of Italian companies appointed women directors in their boards, an unusual and unpredictable fact in the Italian industrial system. This paper investigates if any significant reaction has consequently occurred in the Italian stock market. It assumes that a significant market reaction would indicate the investors view the female board members as a strategic value added at the decision making level. To achieve the objective, it was collected a database consisting of 76 appointments of women directors in 67 Italian listed companies over the period 2012-2016 and then it was investigated the stock price performance of those companies in that five years span. The research hypothesis is examined empirically through the event study methodology in order to check the existence of abnormal returns on the appointment of women directors. Findings suggest that investors do not strongly believe that the simple appointment of women directors would have a positive effect on the future performance of firms.