Gender Quotas in the Boardroom: New Evidence from Germany

We examine the introduction of a gender quota law in Germany, mandating a minimum 30% of the underrepresented gender on the supervisory boards of a particular type of firms. We exploit the fact that Germany has a two-tier corporate system consisting of the affected supervisory boards and unaffected management boards within the same firm. We find a positive effect on the female share on supervisory boards of affected firms, but no effect on presidency of the board or its size. We also study whether the increased female representation has had an effect on the financial performance of the firm and conclude that, unlike some previous studies in other countries, there has not been any negative effect on the profitability of the firm, neither at the time when the law was announced nor when it was passed.