Trickle‐down effect: The impact of female board members on executive gender diversity

Abstract

Female representation at senior organizational levels lags well behind male representation. We investigate whether there is a positive nonlinear relationship between female board representation and female executive representation: the trickle‐down effect. We investigated 1,387 organizations listed on the Australian Securities Exchange between 2003 and 2012 and found the hypothesized nonlinear trickle‐down effect operating between board and executive levels. The trickle‐down effect was strongest after 1 year but still significant after 5 years. We investigated two potential moderators of the effect: organization size and gender diversity recommendations. There was no moderating effect of organization size, but contrary to expectations, gender diversity recommendations slowed the trickle‐down effect. Our findings suggest that organizations can address the paucity of women at senior organizational levels by starting at the top. Specifically, organizations making multiple appointments of female board members should expect improvements in female executive representation. However, the signaling and advocacy opportunities afforded by female board appointments may be less potent in the context of external interventions. Our findings contribute to the ongoing policy debate about the value of regulatory interventions to increase female representation at senior organizational levels and highlight the need for research on the unintended consequences of these interventions across national contexts.