Anna Pillman is graduating with an Honors Bachelor of Science in Finance for her hard work with her thesis titled “The Intersection of Gender and Co-Option on Corporate Boards of Directors.” Anna is from Park City, Utah and will be staying in Utah to begin her job at Goldman Sachs in Salt Lake City starting this July. Congratulations Anna, and welcome to your alumni network! Read on to learn more about Anna’s thesis and her answers to our questions about her Eccles Experience.
Tell us something about your thesis – your research, your findings, or what you learned:
This paper examines the effects that the combination of two measures of board composition, director gender and director co-option, have on the monitoring effectiveness of corporate boards of directors. Controlling for director co-option, I find evidence that director gender has a statistically and economically significant effect on monitoring effectiveness, as measured by firm performance. Increased board co-option leads to poor monitoring quality by way of diminished sensitivity of the likelihood of forced CEO turnover to firm performance, increased CEO compensation, and increased capital expenditure to asset ratios. I separate the effects of co-option by director gender, and show that while increased Board Co-option is associated with decreased return on assets and increased leverage, increased Female Co-option leads to increased return on assets and much smaller increases in leverage. I show that increased Board Co-option has a positive relation with CEO compensation, while increased Female Co-option has a much smaller positive relation with CEO compensation. I find evidence that the first female appointed to the board, denoted by Female Director Shock, leads to decreased CEO compensation, while increased Board Co-option leads to increased CEO compensation. I instrument with Gendered Director Deaths and find that that the death of a non-co-opted director results in a positive, exogenous shock to both Male Co-option and Female Co-option, with Male Co-option experiencing larger effects. Together, these results provide evidence in support of the business case for diversity, and suggest that the presence of more women on the board, despite co-option, leads to improved monitoring effectiveness as measured by accounting performance and changes in executive compensation.
What was your most memorable experience as an Eccles student?
My time in the Student Investment Fund and Honors Valuation.
Is there anyone you’d like to thank, acknowledge or shout out?
Liz Tashjian and Jeff Coles
