Abstract
We draw on a phenomenological model of institutional theory to explore how sub-national policies shape corporate board gender diversity of publicly traded firms. Using a sample of S&P 1500 firms in 49 U.S. states from 2003 to 2014, we find that firms headquartered in states with progressive policies that protect women from discrimination and provide greater availability of emergency contraception and public funding for abortions have greater shares of women directors in their board of directors. Our findings hold after a series of robustness checks and offer implications for theory, policy, and practice.
Highlights
Considerable public discussion centers on perceived career barriers, with one of the most debated topics, the gender composition of the highest echelon of corporate leadership—the board
A Massachusetts study of corporate directors indicates that larger pools of local women in academia and consulting are associated with new routes to boardrooms (Adams & Flynn, 2005), while a Tennessee study reveals low levels of board gender diversity compared with national averages (Helms, Arfken, & Bellar, 2008)
The research question: how do gender specific legislative institutions at the state level shape corporate board gender diversity of publicly traded firms? We test our theory using a sample of S&P 1500 firms which captures 90% of U.S market capitalization and demonstrates the heterogeneity of female board representation across the U.S Controlling for alternative explanations, we find that state-level policies that protect women from discrimination and are progressive regarding family planning are associated with greater shares of female directors
Summary
Considerable public discussion centers on perceived career barriers, with one of the most debated topics, the gender composition of the highest echelon of corporate leadership—the board. A major gap in the literature is attention to lower levels of geographic analysis and local context (Terjesen, Sealy, & Singh, 2009) This gap may be explained by the difficulty in obtaining data and the fact that many developed countries utilize fairly homogeneous national governance systems. In large countries such as the U.S, state laws often supersede federal requirements (Caughey & Warshaw, 2016) and individual states have the power to adopt legal statutes that influence governance practices such as board composition (Luoma & Goodstein, 1999). A Massachusetts study of corporate directors indicates that larger pools of local women in academia and consulting are associated with new routes to boardrooms (Adams & Flynn, 2005), while a Tennessee study reveals low levels of board gender diversity compared with national averages (Helms, Arfken, & Bellar, 2008)
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