Stock Market Reaction When Listed Companies in Singapore Appoint Female Directors

• Main Authors: DING, David K., CHAROENWONG, C.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2013
• Subjects: Securities markets; Appointments & personnel changes; Directors; Women; Regression analysis; Singapore; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3599
• Institution: Singapore Management University

This paper examines the stock market reaction to the appointment of female directors in Singapore-listed companies and investigates what determines the reaction. We study a sample of 30 companies that has met several selection criteria and use the event study methodology applied to data collected before and after the announcement of the appointment of female directors to the boards of these companies. As a proxy for investor reactions, we examine changes in stock market prices of these companies at different points in time. We find a positive announcement effect and, over a two-day announcement period, an average value of 2.31% is generated for shareholders. This enhanced value is positively impacted by non-duality (separation of the offices of CEO and chairperson), and the appointment of women directors as CEO. However, the proportion of women directors, as a variable, did not have a significant effect on share prices. The study suggests that investors in Singapore value the diversity and potential contribution of women on the board of directors.