Despite the growing public concern in recent years about the place of women in business, gender diversity in corporate governance has made little progress. As a consequence, the issue has captured the worldwide attention of policymakers. Several countries are currently adopting or considering the adoption of laws or regulations to promote gender diversity on corporate boards. The purpose of this paper is to compare the effectiveness of using legislative or regulatory means to increase female representation instead of allowing firms to voluntarily fix their own non?legally binding targets. We find that the relation between gender diversity and performance is positive in countries using the voluntary approach while it is negative in countries using the regulatory approach. We conclude that public policy aimed at increasing the number of women on corporate boards should be introduced gradually and voluntarily rather than quickly and coercively to avoid sub?optimal board composition.
