Board gender-balancing, network information, and insider trading

B. Espen Eckbo and Bernt Arne Ødegaard

Following Norway's forced board gender-balancing (12/2007), which more than doubled the network of female directors, the short-term market reaction to the population of primary female insider purchases has become significantly positive. However, accounting for insiders' actual holding periods, this positive network-driven information effect does not map into positive abnormal insider trading performance. During the financial crisis period (10/2008--12/2010), both male and female insiders of the by then gender-balanced boards significantly increased their stock purchases. This increase, which we show does not reflect inside information, suggests that female directors are not more risk averse than their male counterparts.

JEL classification: G14; M14

Keywords Board gender-balancing, director network, insider holdings, trading performance, risk aversion

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