Gender discrimination lawsuits: How board gender diversity impacts gender litigation likelihood and outcomes

Abstract

Gender discrimination in firms is an ongoing problem, yet we know little about whether board gender diversity affects gender discrimination litigation. Boards are an important and visible component of an organization’s leadership and are positioned to influence firm policies and attitudes. Using social identity theory, we consider how board gender diversity impacts firms that face gender discrimination lawsuits. Furthermore, we explore how greater board gender diversity provides reputational capital which acts as insurance against litigation outcomes. Using a dataset of gender discrimination lawsuits and experiments simulating jury decision making, we hypothesize that more gender diversity on the board will protect firms from gender discrimination litigation and its outcomes. We find that firms with greater board gender diversity are at a higher likelihood of incurring gender discrimination litigation yet receive more favorable decisions by judges and juries including a greater likelihood of receiving favorable verdicts and of paying lower damages.