Gender diversity and corporate performance: Emphasis on sustainability performance

In this research, we empirically investigate the impact of the board's female representation on corporate financial and sustainability performance after the introduction of the minimum gender quotas in Italy in 2011 (Golfo-Mosca Law). We studied the 40 companies of the FTSE-MIB index for 3 years 2016–2018. Using yearly regression analysis, pooled analysis, and differential analysis, we find that the female involvement on both boards has almost no significant effect on the financial performance; however, a significant association is found with the corporate sustainability performance. The robustness checks using differential analysis confirm the later relationship in which firms that improved female representation had also an ethical score upgrade. Interestingly, we also provide that there is an optimal level of gender quotas that maximizes sustainability performance and beyond that, a negative impact on performance might be detected.