Does Female Representation on boards of Directors Associate with Increased Transparency and Ethical Behavior?

This study examined the association between corporate transparency and ethical orientation of Fortune 500 companies and the number of females represented on the board of directors from 2010 annual report data.  My basis for this judgment was whether or not the firm was listed on either (both) Ethisphere Magazine’s 2010 “World’s Most Corporate Citizens List”.  My results indicate that, as the number of women directors increased, the probability of a corporation appearing on these lists increases.  I also found that a “critical mass” of women directors was indicated by the data for Ethisphere Magazine’s but not Corporate Responsibility Magazine’s list.  Finally, while being on one of these lists did not increase corporate return data in a statistically significant sense, it did dramatically reduce the level of negative returns.