How do Firms Respond to the Mandated Disclosure of Target Gender Quotas for Top Executive Positions?

We examine a regulatory intervention in Germany aimed at increasing female representation on executive boards through the mandatory disclosure of self-determined target quotas. On average, affected firms responded by increasing female representation, particularly those with larger boards, greater media scrutiny, and state ownership. The public debate around zero-target disclosures and stricter enforcement accelerated these efforts, which do not indicate acts of tokenism. Over time, more firms set and achieved higher target quotas, with peer behavior being the primary driver of ambitious quotas and their achievement. Firms are more likely to commit to increasing female participation if they have suitable talent pools and operate in family-friendly environments. Our findings suggest that while the German government's nudging approach initially prompted limited responses, it has sparked an irreversible shift towards more diverse boards. Over time, more firms are moving away from all-male boards, influenced by the ongoing public discourse and regulatory pressures.