Of Journal Editors and Editorial Boards: Who Are the Trailblazers in Increasing Editorial Board Gender Equality?

Female academics continue to be under‐represented on the editorial boards of many, but not all, management journals. This variability is intriguing, because it is reasonable to assume that the size of the pool of female faculty available and willing to serve on editorial boards is similar for all management journals. This paper therefore focuses on the characteristics of the journal editors to explain this variability; journal editors or editors‐in‐chief are the most influential people in the selection of editorial board members. The authors draw on social identity and homosocial reproduction theories, and on the gender and careers literature to examine the relationship between an editor's academic performance, professional age and gender, and editorial board gender equality. Longitudinal data are collected at five points in time, using five‐year intervals, from 52 management journals. To account for the nested structure of the data, a three‐level multilevel model was estimated. Overall, it is found that the prospects of board membership improve for women when editors are high‐performing, professionally young or female. The authors discuss these findings and their implications for management journals with low, stagnant or declining representation of women in their boards.     

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.     

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.     

Females and Precarious Board Positions: Further Evidence of the Glass Cliff

The ‘glass cliff’ posits that when women achieve high profile roles, these are at firms in precarious positions. Previous research analysed appointments (male/female), estimated the precariousness of firms involved and drew inferences about the glass cliff. This study is different as it directly tests the relationship between a precarious situation and changes in board gender diversity. The sample is companies listed on the UK stock exchange reporting an initial loss in the years 2004–2006. A matched control sample is used in a difference‐in‐differences analysis to avoid inadvertently attributing improvements arising from societal/regulatory changes in gender diversity to the loss event. Findings suggest that when the loss is ‘big’ there is a difference in the increase in gender diversity versus both the control and the ‘small’ loss subsamples, i.e. compelling evidence of the glass cliff. In the context of ongoing political and social debates about women on boards our work (i) identifies continuing structural barriers for women ascending to board level in that women are more likely to be over‐represented on boards of companies that are more precarious and (ii) sounds a note of caution about celebrating increased gender diversity on boards without considering the precariousness of the company involved.     

Sustaining the Buyout Governance Model: Inside Secondary Management Buyout Boards

This paper examines the impact of private equity (PE) directors and their human capital on operating performance in a unique hand‐collected sample of 200 secondary management buyouts (SMBOs) during 2000–2015. It shows that PE directors’ human capital tends to play a statistically and economically important role in performance. Financial (rather than operational) experience of PE directors in acquiring PE firms tends to have a substantial impact on post‐SMBO profitability, while high‐level business education is especially important in post‐SMBO growth performance enhancement. Complementary expertise, provided by directors in buying and selling PE firms, plays an important role only in post‐SMBO growth improvements. Overall, the paper's results provide evidence that governance benefits of the buyout model tend not to be exhausted in the primary buyout stage, but the effects in the secondary buyout phase depend on the nature of PE directors’ human capital resource, notably in respect of the balance between board monitoring and advisory roles. This study therefore adds to growing evidence on how the ownership and life‐cycle nature of firms affect sustainability of boards fulfilling their roles. The results are robust to sample selection bias, different types of PE firms and different measures of human capital.     

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.     

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.     

The Service Role of Outside Boards in High Tech Start‐ups: A Resource Dependency Perspective

Despite growing interest in the board of directors of entrepreneurial firms, the role of outside board members in high tech start‐ups has been largely neglected. This dearth of research is surprising since the high level of resource dependency these ventures face is likely to heighten the potential contribution outside board members can make. We argue that, for high tech start‐ups, the service role the board plays will be crucial in overcoming resource dependencies. In contrast to existing studies that tie the outside boards’ servicing role to board characteristics, we propose that greater attention needs to be paid to the resource profile of the venture. Building on resource dependency theory, we find that the extent to which the outside board members fulfil a service role is dependent on the initial human, financial and technological resource base of the entrepreneurial venture. Specifically, we find that ventures with less diversified teams, teams with lower levels of R&D experience and higher levels of financial experience and ventures earlier in the technological development process receive higher levels of support from the outside board.     

Do ‘soft law’ board gender quotas work? Evidence from a natural experiment

In a new era of “open governance”, in which societal and corporate change is taking place, 15 predominantly European countries, including Spain, enacted board gender quotas to increase the share of women on boards. In this paper, we explore the effectiveness of the European Union’s first “soft” quota – the 2007 Spanish Gender Equality Act recommending all large public and private Spanish firms to appoint a target of 40 percent of each gender to serve as board directors by 2015. The Act provides an incentive in that quota compliant firms may receive a preference for the tendering of public contracts. We draw on institutional and resource dependency theories to motivate the first empirical test of a “soft” quota which is distinct from Norway’s “hard law” board gender quota, and more similar to the proposed EU-wide quota. Using a large novel panel of 767 Spanish firms and 2786 firm-year observations from 2005 to 2014, we exploit the Spanish Act as a natural experiment and employ a difference-in-differences model. We find that less than nine percent of targeted firms fully comply with the quota. Firms that depend on public contracts are significantly more likely to increase female representation, although quota compliant firms do not actually benefit from the Act’s potential incentive. The results highlight the Spanish government’s lack of commitment to the quota, and that the quota’s normative obligations did not trigger the adoption of gender-balanced boards.     

Bankers on boards as corporate governance mechanism: evidence from Poland

This paper examines whether a bank exercises a monitoring role when a banker is represented on a firm’s board. Bank monitoring reduces information asymmetries, and hence lessens firm’s financial constraints—phenomenon frequently measured by investment-cash flow sensitivity in the sample of all non-financial companies listed during 1999–2002 on the Polish stock exchange. I find that firms with a banker on the board rely more heavily on bank loans than on internal capital in their investment activities. In contrast, firms with no banker on the board finance to a larger extent their investment with internal capital than with credit. However, firms with the bank-lender representation on the board are almost as much financially constrained as firms without a bank-lender representative on the board. Hence, the presence of bankers on boards is not associated with bank monitoring. They rather promote their employer’s business. The findings show that investment of firms with a banker on the board is less sensitive to cash flow than investment of firms without bank representatives on the board. This result suggests that bankers on the board provide financial expertise that help those firm to reduce financial constraints.     

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.     

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.     

Does director capital influence board turnover after an incident of fraud? Evidence from Italian listed companies

Studies in U.S. have found that that director capital influences turnover within the board after an incident of fraud. We analyse whether there is a relationship between the probability of non-executive director turnover in Italian listed firms in which fraud has occurred and each director’s level of: (1) general business knowledge, (2) industry knowledge, and (3) relational capital. Our results suggest that non-executive director departure can be explained as a result of decisions by companies to clean their house of directors with lower expertise, industry knowledge and relational capital. These findings indicate that firms encourage the departure of these non-executive directors to signal to their stakeholders that they want to repair legitimacy and want to enhance the monitoring and resource provider tasks of the board. Indeed, in Italy, director turnover is more marked when the fraud visibility is greater. Furthermore, our study findings indicate that the cleaning house strategy is not influenced by the ownership structure and identity.     

The Effect of Board of Directors’ IT Awareness on CIO Compensation and Firm Performance

Chief information officers (CIOs) play increasingly strategic roles in firms in this competitive global economy, which is now largely powered by information technology (IT). However, research has shown a lack of board of directors’ oversight on CIO‐ and IT‐related issues. Drawing on agency, resource dependence, and alignment theories, we investigate the effect of board of directors’ IT awareness on CIO compensation structure and firm performance. We conduct cross‐sectional time series analyses of data collected from various sources. Our study underlines three important findings. First, we show that some commonly known executive compensation determinants, such as individual characteristics and governance structure, do not have significant effects on CIO compensation structure. Second, with regard to CIO compensation structure, firms respond to increasing information asymmetry differently according to the level of IT awareness of their boards. Finally, firms perform better when their boards have higher levels of IT awareness, and this positive effect of IT awareness is considerably larger in IT intensive industries. Overall, our study provides empirical support for the important role of boards’ IT awareness in shaping CIO compensation and improving firm performance. Our results suggest that boards with functional area knowledge—or higher IT awareness in this case—can more effectively monitor and better incentivize executives, and consequently lead to better firm performance.     

When labor representatives join supervisory boards: empirical evidence of the relationship between the change to parity codetermination and working capital and operating cash flows

We examine how the change to 50% labor representation on German supervisory boards is related to working capital and operating cash flows, since both are proxies for short-term financial policies. We expect the change to be associated with reduced working capital and increased operating cash flows. Using a difference-in-differences model, we compare a sample of listed and non-listed firms that changed to parity codetermination between 1987 and 2014 with two different groups of control firms that did not change their level of codetermination. In line with our hypotheses, the results suggest that a change to parity codetermination is related to lower working capital and higher operating cash flows compared to our control firms. We conclude that firms begin to engage in more efficient working capital management due to the change to parity codetermination on supervisory boards. We also conclude that the positive short-term effects on the firms’ operating performance imply that labor representatives do not bear just the interests of employees in mind, but also those of other stakeholders.     

Contingencies versus External Pressure: Professionalization in Boards of Firms Affiliated to Family Business Groups in Late‐Industrializing Countries

We examine the antecedents of professionalization in boards of firms affiliated to family business groups, increasingly recognized in the literature as the dominant form of big business organization in many late‐industrializing countries. Dimensions of board professionalization that we include in our study are board size, ratio of salaried executives and outsider presence. We compare predictions on board composition derived from contingency, institutional and power perspectives. Turkish family business groups, considered as an archetypal example of this form of organization, provide the empirical setting for the study, with data on 299 firms affiliated to ten different family business groups. Our results provide greater support for institutional and power perspectives, showing that, relative to internal and external complexity facing affiliate firms, institutional pressures and the presence of joint venture partners better predict board professionalization.     

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.     

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.     

The Importance of Compensating Strategic Network Board Members for Network Performance: A Contingency Approach

Firms in government‐supported strategic networks tend to rely on professional network board members for support and assistance. As such, two significant issues arise: should board members be compensated and under which circumstances is compensation more – or less – effective for network performance. Based on yearly panel data from 53 government‐supported strategic networks of small‐ and medium‐sized enterprises over a five‐year period, this study examines the effects of compensating network board members. Advocating for a contingency approach, we combine the agency and stewardship literatures to posit that the effects of compensation are moderated by contingency factors that stimulate either an agency or stewardship relationship between the network board and the networking firms. Our findings indicate that significant funding, network firms represented on the network board, and top‐down network formation stimulate board members to become agents rather than stewards. This therefore explains the higher effect of board member compensation under such conditions.     

CEO Duality,Agency Costs,and Internal Capital Allocation Efficiency

This study examines the impact of CEO duality on firms’ internal capital allocation efficiency. We observe that when the CEO is also chair of the board, diversified firms make inefficient investments, as they allocate more capital to business segments with relatively low growth opportunities over segments with high growth opportunities. The adverse impact of CEO duality on investment efficiency prevails only among firms that face high agency problems, as captured by high free cash flows, staggered board structure and low board independence. Depending on the severity of the agency problem, CEO duality is associated with a decrease in industry‐adjusted investment in high‐growth segments of 1% to 2.1% over the following year, relative to that in low‐growth segments. However, CEOs’ equity‐based compensation curbs the negative effect of CEO duality on internal capital allocation efficiency. Overall, the findings of this study offer strong support for the agency theory and postulate the internal capital allocation policy as an important channel through which CEO duality lowers firm value in diversified firms.