Institutional Logics about the Place of Women on Boards: Uncertainty and Shareholder Dissent

Abstract

Despite persuasive investment rhetoric about benefits that accrue to firms with more female directors, women remain woefully underrepresented on boards. We identify two institutional logics about the place of women on boards that compete in the extent to which they posit women as belonging on boards: a dominant, “business case,” logic (women belong) and a latent, “think leader- think male,” logic (women don’t belong). We propose that uncertainty causes a switch from the business case to the think leader-think male logic in evaluations of women’s place on corporate boards. We test our predictions with data from shareholder votes on director elections. Using a sample of 50,850 director elections at 1,124 organizations over a period of 13 years, we find that female directors on average receive less dissent from shareholders and even less so when their board has fewer women, supporting our contention of a dominant business case logic around the place of women on boards. Supporting our contention that uncertainty triggers the competing think leader-think male logic, we also find that under conditions that create uncertainty (e.g., poor firm performance, problematic director board attendance, lengthy director board tenure) female directors receive more shareholder dissent than their male counterparts. Keywords: Female directors, Institutional logics, Shareholder dissent, Uncertainty