In 2006, Norway imposed a quota requiring that the boards of directors of public limited companies be composed of at least 40 percent female members. Governments across Europe have since adopted or proposed similar rules. This paper examines the impact of the Norwegian quota on the management style of affected firms by comparing them to other Scandinavian companies, public and private, that were unaffected by the rule. Based on differences-in-differences and triple-difference models, we find that firms affected by the quotas undertook fewer workforce reductions than comparison firms, increasing relative labor costs and employment levels and reducing short-term profits. There is no evidence of preexisting trends, and the effects are strongest among firms that had no female board members before the quota was introduced. The boards appear to be affecting corporate strategy in part by selecting likeminded executives. The results are consistent with changes in board composition affecting corporate governance and strategy, and with prior research suggesting that female managers may be more stakeholder or long-term oriented than their male counterparts.

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We investigate the relationship between a managers inuence on …rm …nancial and social performance. To examine the mechanism governing the relationship between a managers investment decisions along both dimensions of performance, we use a formal agency theory model to develop testable propositions. Consistent with the predictions generated from the model, we …nd that a managers inuence on …rm corporate social responsibility activities is negatively related to their inuence on …nancial performance. Also, as suggested by the implications of the model, we …nd that managers who operate in industries with more volatile …nancial performance and receive a lower share of compensation from incentive-based pay are more likely to have a positive inuence on rm social performance. 1 1

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