Do board subcommittees boost European firm value? The moderating role of gender diversity on boards

The main objective of this study is to analyse the moderating effect of corporate board gender diversity on firm value for 1490 European listed companies between 2016 and 2018. The aim is to investigate whether companies that have different subcommittees (Audit, Corporate Governance, Nomination and Compensation), or that have financial expertise on the audit committee, see increases or decreases in firm value due to the moderating effect of gender diversity. The most striking evidence reveals that the effect of gender diversity on corporate boards, considering all countries in the European sample, could positively impact firm value by moderating the corporate governance and compensation committees. In contrast, when grouped by governance structure, only in the case of one‐tier boards is the moderating effect on the governance committee determinant. Likewise, this moderating effect on the compensation committee may increase firm value, but only in countries with two‐tier corporate boards. On the other hand, our results suggest that the moderating role of women directors on the audit committee with financial expertise and on the nomination committee, while not increasing firm value, could prevent its further decline by acting as a shield for the Nordic and two‐tier groups, respectively. Our findings have important implications for company managers, as these subcommittees could exert a positive influence on the decision‐making process, such as reducing information asymmetries and agency costs.