Women do the job. The Reasons to make women sit on boards

We study the effect of gender diversity, enforced by regulation on quota, on board processes that enhance board tasks: (1) firm monitoring; (2) firm strategy; and (3) management advising. Based on the unique qualitative data from 2008 to 2015 on board activities of the top listed companies in Italy, we find regulation on quota in Italy matters for the firm monitoring and strategy related-tasks, but decreases control over executive compensation. All of the evidence suggest that diversified boards after introducing quota are indeed stronger monitors and more involved in the strategy-related tasks due to improved board decision making culture and board development activities we all as board independence. Although the quota has negative effect on the relationship between female directors and a well-balanced membership of the board maybe due to the fact that there are very few women in Italy ready for boards caused by non-supportive institutional settings.