Abstract
AbstractResearch Question/IssueThis study seeks to understand the circumstances under which board behavior is affected by gender diversity. The “reasoned action approach” is used as a lens through which to assess the extent that the behavior of the board varies with its gender diversity.Research Findings/InsightsThe study uses archival data from a panel sample of 80,395 directorships observed between 1998 and 2012. Boardroom gender diversity is significantly related to director personal responsibility (board attendance), CEO accountability, and risk taking. Our findings highlight the key importance of the exposure of male directors to women directors on boards beyond the focal board. This suggests a positive externality or a spillover effect.Theoretical/Academic ImplicationsThe empirical findings of this study highlight the importance of allowing for the operation of social norms when studying boardroom decision making. Experience gained by male directors of working with women directors on other boards, beyond the focal board, is shown to enable women directors to contribute more effectively.Practitioner/Policy ImplicationsThis study offers encouragement to policy makers' intent on increasing the presence of women on corporate boards. These results point to a spillover effect: there is an observed impact of women on boards that acts not only directly on the board on which they sit but also through the network of boards on which their male counterparts sit.Video Abstracthttps://youtu.be/ZlADhUUdZrA
Highlights
There have been calls (Adams, de Haan, Terjesen, & van Ees, 2015; Hoobler, Masterson, Nkomo, & Michel, 2018; Kumar & Zattoni, 2016) for more research on the characteristics of female directors and the contributions they make to company performance
We find that director behavior and decision making are affected by boardroom gender diversity
A key finding is that these effects are associated with gender diversity on the focal board and with male director experience of working alongside female directors on other boards
Summary
There have been calls (Adams, de Haan, Terjesen, & van Ees, 2015; Hoobler, Masterson, Nkomo, & Michel, 2018; Kumar & Zattoni, 2016) for more research on the characteristics of female directors and the contributions they make to company performance. We find that the presence of female directors on a board alongside externally connected male directors is associated with resource allocation decisions that result in lower firm risk. This analysis is conducted using data on 80,395 directorships in the United States between 1998 and 2012. We include firm effects, to take account of the possibility that there are other unobserved firm‐level factors that can influence both firm risk and the choice of having externally connected male directors on the board and year fixed effects in all specifications.
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