TAF PUBLISHING

This study examines investor reactions to the appointment of female directors in New Zealand-listed companies. Using the event study method, we find that female director tend to be appointed as independent directors rather than in a Chief Executive Officer (CEO) role. The results reveal that female board appointments are generally negatively associated with stock performance. This study captures both the gender diversity arising in New Zealand companies and the stock price performance resulting from the reaction of investors to the different positions of female directors. The evidence of a decrease in market performance is shown by the negative Cumulative Average Abnormal Returns (CAARs) from the announcements of women appointees to the board. The findings of this article have some practical implications for policymakers. Although firms that appoint women to their boards can enjoy good publicity for their support of gender diversity through the mass media, they should be mindful of the negative market response that follows such announcements, as evidenced by the results of this study. Should firms find the need to appoint female directors due to their commitment toward gender diversity, they should be appointed to the role of non-CEO directors rather than CEO-directors.