Female Leadership and Value Creation: Evidence from London Stock Exchange

This study examines the effects of female leadership, at both board-level and individual-level, on the corporate value of UK FTSE100 stocks. United Kingdom is a valuable sample for this research as the UK governance sets the goal that at least a third of UK boardroom positions should be held by women by the end of 2020. Using the GMM approach with a dataset of 96 publicly firms from 2006 to 2016; our analysis reveals strong evidence that the existence of female directors on board is positively associated with firm value (Tobin’ Q). Testing for the female director positions, we interestingly found the competing results: the relation between the female chairman and firm value is significantly positive whilst there exists an adverse link between female CEO and firm value. The findings imply a significant effect of quota laws for gender diversity of boards of directors and female directors’ positions on UK corporate market value.