Institutional ownership and women in the top management team

Abstract

The business community is interested in the issue of gender representation in the workplace and within the top management team (TMT). One avenue for increasing gender diversity of the TMT is pressure from shareholders. Institutional investors have largely replaced individual shareholders, and some institutions are outspoken about gender issues in the workplace. We appeal to stakeholder theory to develop the hypothesis about the impact of institutional ownership on TMT gender diversity. Empirical results show that institutional ownership is linked to higher proportion of top female executives. Our results also suggest that institutional investors achieve greater gender diversity of the TMT by making corporate boards conform to favored characteristics.