The Big Three and Board Gender Diversity: The Effectiveness of Shareholder Voice

In 2017, “The Big Three” institutional investors launched campaigns to increase gender diversity on corporate boards. We estimate that their campaigns led firms to add at least 2.5 times as many female directors in 2019 as they had in 2016, accounting for most of the increase in board gender diversity over that period. Firms increased diversity by looking beyond managers’ existing networks to identify candidates and by placing less emphasis on candidates’ executive experience. Firms also promoted more female directors to key board positions, indicating firms’ responses went beyond mere tokenism. Our results highlight index investors’ ability to effectuate broad-based governance changes and shareholder advocacy’s potential to expand women’s participation in corporate leadership more extensively than government mandates.