Why and when female directors are less engaged in their board duties: An interface perspective

Female representation on boards is perhaps one of the most studied topics in board-governance research. At the same time, much is unknown about female directors' task engagement within boards. Drawing from psychological theory on societal gender beliefs, our study tests whether the impact of director gender on supervisory task engagement hinges on status dynamics in two relational interfaces: the director–board interface and the director–CEO interface. According to this perspective, female directors show less task engagement because gender is a diffuse status cue that creates status differentiation within the director–board interface. Multi-source board survey data (n = 61 boards, n = 315 directors) confirms that, within the confines of the boardroom, female directors do, indeed, receive lower-status ratings than male directors. This effect is weaker when boards have a female chair. Furthermore, lower status explains perceived lower task engagement of female directors, but this link critically hinges on the CEO–director interface. The impact of status differences is more pronounced when directors intersect with a relatively dominant CEO. All in all, the results demonstrate that relational interfaces play a key role for female directors’ task engagement in their board duties.     

Does the presence of independent and female directors impact firm performance? A multi-country study of board diversity

This study empirically analyzes whether gender diversity enhances boards of directors’ independence and efficiency. Using data from 3,876 public firms in 47 countries and controlling for a wide set of corporate governance mechanisms, we find that firms with more female directors have higher firm performance by market (Tobin’s Q) and accounting (return on assets) measures. The results also suggest that external independent directors do not contribute to firm performance unless the board is gender diversified. These results hold with respect to different estimation models and robustness tests. Overall, our findings provide evidence that the female directors enhance boards of directors’ effectiveness. Finally, we find that firms that are concerned with board independence, and that firms in more complex environments are more likely to have gender-balanced boards.     

All on board? New evidence on board gender diversity from a large panel of European firms

Using a unique database of over 20 million firms over two decades, we examine industry sector and national institution drivers of the prevalence of women directors on supervisory and management boards in both public and private firms across 41 advanced and emerging European economies. We demonstrate that gender board diversity has generally increased, yet women remain rare in both boards of firms in Europe: approximately 70% have no women directors on their supervisory boards, and 60% have no women directors on management boards. We leverage institutional and resource dependency theoretical frameworks to demonstrate that few systematic factors are associated with greater gender diversity for both supervisory and management boards among both private and public firms: the same factor may exhibit a positive correlation to a management board, and a negative correlation to a supervisory board, or vice versa. We interpret these findings as evidence that country-level gender equality and cultural institutions exhibit differentiated correlations with the presence of women directors in management and supervisory boards. We also find little evidence that sector-level competition and innovativeness are systematically associated with the presence of women on either board in either group of firms.     

Breaking the boardroom gender barrier: the human capital of female corporate directors

Although there is a paucity of female corporate directors in Canada, women are slowly managing to break the gender barrier of all-male boards of directors. Using resource dependency theory a model is developed that identifies the human capital characteristics that contribute to a woman being appointed to an all-male board. The model is tested on a sample of 193 Canadian firms that appointed women to their boards of directors between 1996 and 2004. The results show that women who are appointed to all-male boards have specialized knowledge skills; either they have firm-specific knowledge as insiders, or they are support specialists with a specific financial or legal expertise.     

Women on the boards of listed companies: Evidence from Finland

This paper investigates gender differences on the corporate boards of Finnish listed companies. The personal characteristics, careers, and boardroom roles of female and male directors on boards were analyzed on the basis of empirical data collected by questionnaire. An analysis of the findings revealed only minor differences between the women and men in personal characteristics such as their marital status, number of children and education, or in their careers. However, female board members were on average younger than their male counterparts and considered themselves to be more protean, took more active roles on the board, and enjoyed power more than men did. They also felt a need for more women on the board. The goal of this study is to contribute to the existing research in two ways. Firstly, it provides empirical evidence on women??s representation on boards from Finland, where women??s and men??s rights are regarded as more equal than in many other countries. Secondly, the study aims to increase our knowledge of gender differences, careers and roles of women in top positions in Finnish business.     

Female board appointments and firm valuation: short and long-term effects

The presence of women on boards of directors has become a high profile issue in recent years. Several studies, based largely on data from countries with Anglo-Saxon corporate governance systems, have investigated the influence of female board appointments on firm performance. This study focuses on the impact of female directors in Spain, where debate about this topic has been intense for two reasons: the recommendation in 2006 by Spain’s Unified Good Governance Code of positive discrimination in favour of female board appointments and the passing in 2007 of a Gender Equality Act by the Spanish parliament. Our paper analyses the short and long term effect of the appointment of female directors prior to these events. We use an event study to analyze the short term stock market reaction to the appointment of female directors and a multiple regression approach, using the system GMM estimation procedure, to assess the long term influence on firm value of female boardroom appointments. We find that the stock market reacts positively in the short term to the announcement of female board appointments, suggesting that investors on average believe that female directors add value. This belief appears to be confirmed by our regression results which show that female board appointments are positively associated with firm value over a sustained period. These results suggest that the legislative changes in Spain make economic sense as well as advancing the cause of women in Spanish boardrooms.     

The gender composition of corporate boards: A review and research agenda

In recent years, the composition of boards and, particularly, the inclusion of women on boards has attracted significant scholarly interest and public debate. In this article, I comprehensively review the academic literature on board gender composition. Using the systematic review method, I ask whether women directors really are different from men on boards, what factors shape board gender composition, how board gender composition affects organizational outcomes, and finally, why board gender quotas and other forms of regulation are introduced and what outcomes can be expected. Based on my findings, I develop a conceptual framework that clarifies the causal processes underlying both women's access to boards and the effects of women's presence on boards. Finally, I offer a research agenda designed to enrich our understanding of board gender composition.     

Ownership and corporate social responsibility: "The power of the female touch"

Using a sample of 26,029 firm-year observations over the period 2002–2017 from 4,479 firms and 44 countries, we examine the relationship between ownership concentration and corporate social responsibility by focusing on the mediating role of board gender diversity and the moderating role of family shareholding. We find that ownership concentration negatively affects corporate social responsibility, and the board gender diversity partially mediates this negative effect. Our results indicate that the mediating effect of board gender diversity leads to a 10.65 percent decrease in the impact of ownership concentration on corporate social responsibility. Furthermore, moderated path analysis indicates that family shareholding weakens the direct effect of ownership concentration on board gender diversity and its indirect effect on corporate social responsibility. In post hoc analysis, we also document that the effect of gender diversity on the board is more prevalent in high gender-egalitarian societies where women are more involved in decision-making. Our study addresses the strategic role of female board members in increasing firms’ respect for corporate social responsibility, especially in family-controlled firms. Thus, our results may provide insights to regulators and policymakers to enhance firms’ corporate social practices by encouraging women’s participation on corporate boards.     

Corporate governance and board accounts: exploring a neglected interface between boards of directors and management

There is an absence of research about what information boards of directors have access to and how they use that information. The purpose of this paper is to explore and theorize about the content and use of information to boards of directors. The paper introduces and elaborates on the concept of ‘board accounts’, which is defined as the information supplied to boards of directors by top-management. The paper locates the board accounts in the Swedish institutional setting and demonstrates how the concept can be operationalized in an empirical setting. On the basis of a unique material of archived board records in a Swedish company, the paper explores the board accounts over a period of 10 years (1989–1998). It is found that while use of the board accounts in the case study company changes considerably over time, the content of the board accounts remains largely unchanged. This raises questions about where and when directors receive information, the reliability of the information in the board accounts, and recent attempts to integrate corporate governance and management accounting (CIMA, Performance reporting to boards: a guide to good practice, 2003; CIMA strategic scorecard: boards engaging in strategy, 2005; Seal, Management Accounting Research 17(4):389–408, 2006). Finally, the paper discusses the merits of historical archive-based approaches in this field and possibilities for future research.

Firm size and board diversity

This study seeks to understand the relation between firm size and supervisory board composition. Specifically, we ask if and how firm size influences occupational and international background diversity in supervisory boards. Relying on resource dependence theory and theories of organizational behavior, we hypothesize that board diversity with respect to directors’ occupational background will increase with firm size, while the relation between firm size and board diversity with respect to directors’ international background will be concave. Using archival data for supervisory board members of 151 German firms listed in the German stock exchange indices DAX, MDAX, SDAX and TecDAX for the business year 2005, we find empirical support for our hypotheses: Both, occupational and international background diversity increase with increasing firm size, but international background diversity does so at decreasing rates.     

Corporate social responsibility in the board room – when do directors pay attention?

When do board directors pay attention to corporate social responsibility (CSR) issues? Board directors have traditionally focused on maximizing shareholder profit and viewed corporate governance narrowly as a way to meet this goal. They have paid little or no attention to CSR issues because they see CSR as a contrast to profit maximization. We argue in this article that companies can no longer ignore CSR. We propose that three conditions must be met in order for boards to pay attention toCSR. First, the board must have a mindset that considers CSR as contributing value to the firm. Second, the board must have relevant competences that enable members to understand CSR issues. Third, compensation of top-level management should reflect CSR performance. The first two conditions are directly linked to human resource development because, in order to embrace the specific challenges that CSR possesses, board members must develop an understanding of the CSR field and related challenges and opportunities for the company.     

Women on corporate boards: key influencers or tokens?

This paper investigates how the increasing ratio of women directors on corporate boards is associated with decision-making dynamics, specifically the perceived participation and influence of the women on the board. We test hypotheses using a sample of 458 women on Norwegian corporate boards where the ratio of women directors among board members ranges from 11 to 100%. Overall, we find that women perceive that they have a high level of information sharing, a low level of self-censorship, and a high level of influence across the different ratios of board membership held by women directors. These results support the notion of women directors as significant influencers. However, the results also show that women directors perceive that they do receive more information and engage in more informal social interaction when the ratio increases, and perceived influence does also increase when the ratio increases.     

Job-related diversity: the comprehensiveness and speed of board decision-making processes—an upper echelons approach

Strategic decision-making processes influence firm-level outcomes. Using the theory of upper echelons, this study investigates how diversity in directors’ skills, knowledge, and industry experience influence board decision-making processes that may impact overall strategic decision-making processes. Such diversity has been commonly accepted to be a ‘double-edged sword’—enhancing comprehensiveness but hindering the speed of decision-making. On the contrary, we used an existing large survey database to show that directors’ diverse educational background, functional background, and industry experience (job-related diversity) have a positive effect on comprehensiveness as well as the speed of board decision-making. In addition, our results indicate that board processes (directors’ use of their knowledge and skills) play an important role by transmitting the positive effects of diversity. The study is in a tradition of exploring how boards may influence firms’ strategic decision-making processes. Our findings provide additional arguments for adding job-related diversity to boards of directors.     

A Contingency Model of Boards of Directors and Firm Innovation: The Moderating Role of Firm Size

This study asserts that the effects of board characteristics on firm innovation need to be evaluated with reference to contingency variables. A literature review suggests that relatively few studies adopt a contingency view when examining the outcomes of boards of directors. This study examines the influence on firm innovation of characteristics such as board size, outsider ratio and board diversity, and suggests that their influence is contingent upon firm size. The model is tested on a sample of Italian companies and finds support for the contingency hypothesis. This study advances research on boards of directors by emphasizing the importance of context.     

Symbolic Management and the Glass Cliff: Evidence from the Boardroom Careers of Female and Male Directors

This paper uses archival board data to demonstrate that women who take positions as directors of UK companies have shorter tenures than their male counterparts. The authors show that female directors face a much higher risk of dismissal as they approach nine years of service on the board, when their long service deprives them of the all‐important classification as ‘independent’. At this point, their position on the board becomes precarious. Male directors do not suffer the same increase in boardroom exit. This gender‐specific difference is clearly shown to be linked to the independence status. It is argued that these observations are consistent with the notion that female directors are being used in the symbolic management of corporate governance and that, at nine years, when the cloak of independence disappears, women directors are then exposed to the biases that arise from role congruity issues.     

The causes of gender diversity in Malaysian large firms

The issue of women’s representation at the decision-making level in Malaysia has received special attention from the Government since 2004, the year in which it adopted a policy requiring that 30 % of the posts at the decision-making level in the public sector be filled by women. In 2011, the policy was extended to the private sector where 30 % of listed firms’ board seats are to be allocated to women with 2016 being the deadline for compliance. To this end, this paper aims at examining the factors that determine the appointment of women to the boards of Malaysian large firms. Large firms were chosen in this study because they have the resources and the capacity to adopt the policy more readily than smaller firms. The results reveal that gender diversity is positively associated with board size and the presence of family on the board. That is, the larger the board, the more likely it is that women sit on it. The fact that the presence of women on the board is associated with the presence of one or more family members on the board means that the appointment of women to the board is very much influenced by family ties rather than commercial reasons. The results also reveal a positive association between board independence and the proportion of women directors. Further, it is found that board independence is associated positively with the presence of independent women directors. Finally, the results show that firm performance is negatively associated with gender diversity. That is, firms with low financial performance are more likely to have women on their boards. Hence, taken altogether, the evidence suggests that the appointment of women to the board is very much driven by tokenism and family connection rather than by the business case.     

Increasing women's contribution on board decision making: The importance of chairperson leadership efficacy and board openness

In the last decade, the number of women on corporate boards has increased slightly, but the prevailing minority status of women directors implies that they will continue to face social barriers. While prior research has largely focused on explaining social barriers (e.g., being categorized as an out-group member) to increase diversity and its negative consequences, how boards can avoid these obstacles remains unclear. Stemming from recategorization theory, we examine whether and to what extent board chairperson leadership efficacy and board openness (as mechanisms to avoid out-group bias) enhance the influence of women when they are in the minority in board decision-making. In a sample of 146 Norwegian firms, we found a positive relationship between women minorities and women directors’ contribution to board decision-making. Moreover, we found that this positive impact increases when the board chairperson exercises leadership and the board operates in an atmosphere of openness.