This paper examines the impact of gender diversity on board effectiveness and corporate performance. Using a large panel of data on publicly traded firms from 1996-2003, the authors find that female directors are less likely to have attendance problems than male directors. Additionally, the presence of more female directors on a board is associated with better attendance behavior by male directors. Firms with more diverse boards also provide directors with more performance-based pay and hold more board meetings. These findings suggest that diverse boards are more effective in monitoring and overseeing corporate activities. However, the paper also finds that the positive relationship between gender diversity and corporate performance is not robust to attempts to address endogeneity. Instead, the average effect of gender diversity on both market valuation and operating performance appears to be negative. This negative effect is driven by companies with greater shareholder rights. In firms with weaker shareholder rights, gender diversity has positive effects. The authors argue that diverse boards are tougher monitors, but mandating gender quotas in the boardroom may not increase board effectiveness on average, but may reduce it for well-governed firms where additional monitoring is counterproductive. The paper also finds that firms with female directors are larger, have more business segments, and have worse performance in terms of Tobin's Q but better performance in terms of ROA and lower volatility than firms without female directors. The results suggest that firms' choices to nominate female directors are significantly influenced by firm and industry characteristics. The authors conclude that gender diversity has a significant impact on board governance, but the overall effect on corporate performance is mixed. The paper provides evidence that gender diversity can enhance board effectiveness, but the impact on corporate performance is not always positive.This paper examines the impact of gender diversity on board effectiveness and corporate performance. Using a large panel of data on publicly traded firms from 1996-2003, the authors find that female directors are less likely to have attendance problems than male directors. Additionally, the presence of more female directors on a board is associated with better attendance behavior by male directors. Firms with more diverse boards also provide directors with more performance-based pay and hold more board meetings. These findings suggest that diverse boards are more effective in monitoring and overseeing corporate activities. However, the paper also finds that the positive relationship between gender diversity and corporate performance is not robust to attempts to address endogeneity. Instead, the average effect of gender diversity on both market valuation and operating performance appears to be negative. This negative effect is driven by companies with greater shareholder rights. In firms with weaker shareholder rights, gender diversity has positive effects. The authors argue that diverse boards are tougher monitors, but mandating gender quotas in the boardroom may not increase board effectiveness on average, but may reduce it for well-governed firms where additional monitoring is counterproductive. The paper also finds that firms with female directors are larger, have more business segments, and have worse performance in terms of Tobin's Q but better performance in terms of ROA and lower volatility than firms without female directors. The results suggest that firms' choices to nominate female directors are significantly influenced by firm and industry characteristics. The authors conclude that gender diversity has a significant impact on board governance, but the overall effect on corporate performance is mixed. The paper provides evidence that gender diversity can enhance board effectiveness, but the impact on corporate performance is not always positive.