Issues of social justice underlie the clamour for greater gender balance in top-management. The present study reveals that pursuit of such social justice is also value-enhancing in relation to the longer-run performance of initial public offerings stocks, especially where female board members are unencumbered by family-connection with other directors. This study examines the economic benefits of board gender diversity for state- and privately controlled firms in the Hong Kong IPO market. Gender board diversity is much less common in state-run IPO (...) firms. Within the subset of privately controlled IPO firms, distinction exists between entities that accommodate family-connected board officers and those that do not. Specifically, this study focuses on family-ties between board members. This issue allows for finer-grained assessment of family influence on firm performance. Stronger post-listing stock, return-on-assets and sales-on-assets performance arise in privately controlled firms without family-connected board members and in state-run entities. Gender diversity thus serves as a positive, but only when female director presence is untrammelled by family associations between directors. However, there is little evidence of a link between female board representation and IPO underpricing. Relative to state-backed issuers, privately controlled firm boards accommodate more women, younger officers and a broader mix of nationalities, but appear more-inclined to unify CEO and chair positions. Board duality, the fraction of independent directors and directors’ age and nationality exhibit little relation with initial and aftermarket stock returns. In prescriptive terms, minority investors gain from the inclusion of female directors, especially when IPO firm directors are unencumbered by family-affiliation with other board members. Results therefore add to the clarion of calls for greater female board presence. (shrink)

In this study, I examine the role racial minorities in the boardroom can play in reducing social injustice by promoting more equal access to mortgage credit to minority households. I develop a simple theoretical model that posits directors who are racial minorities provide the credit unions they govern with a perspective that shapes lenders’ trust of minority applicants. This trust is shaped by homophily and the tendency of individuals to prefer interactions with similar individuals. Using mortgage loan data from a (...) cross-section of credit unions in the United States from 185,446 applications, I find that credit unions where the majority of board members are minorities are less likely to reject a similarly qualified minority applicant than their counterparts. Governance by minority directors significantly reduces the effects of discrimination faced by minority applicants. The board’s effect is strongest in minority neighborhoods and where the homophily is stronger between directors and applicants. (shrink)