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Critical Mass on Corporate Boards: Why Three or More Women Enhance Governance
... La mayoría de las iniciativas de diversidad de género se basan en la opinión de que la presencia de mujeres puede promover significativamente la eficacia de la gobernanza al interior de las empresas mediante el aumento de la legitimidad de las prácticas empresariales (Hillman et al., 2007), una mejor capacidad para supervisar el rendimiento de los directores generales (Kramer et al., 2007), más facilidad para el trabajo entre culturas, razas y etnias (Tavanti y Werhane, 2013), un incremento de autoeficacia en el contexto del liderazgo global (Javidan et al., 2016), aptitudes para la toma de decisiones de mayor calidad (Cruz et al., 2012;Dezsö y Ross, 2012), alto nivel de colaboración (Kramer et al., 2007;Dezsö y Ross, 2012;Javidan et al., 2016), mayor creatividad (Hillman et al., 2007;Dezsö y Ross, 2012) y, por último, un mayor compromiso organizativo (Hillman et al., 2007;Dezsö y Ross, 2012). Es interesante que varios autores concuerdan en destacar aspectos relacionados con las habilidades blandas en la gobernanza corporativa de las mujeres, las cuales pueden favorecer su presencia en el directorio. ...
... La mayoría de las iniciativas de diversidad de género se basan en la opinión de que la presencia de mujeres puede promover significativamente la eficacia de la gobernanza al interior de las empresas mediante el aumento de la legitimidad de las prácticas empresariales (Hillman et al., 2007), una mejor capacidad para supervisar el rendimiento de los directores generales (Kramer et al., 2007), más facilidad para el trabajo entre culturas, razas y etnias (Tavanti y Werhane, 2013), un incremento de autoeficacia en el contexto del liderazgo global (Javidan et al., 2016), aptitudes para la toma de decisiones de mayor calidad (Cruz et al., 2012;Dezsö y Ross, 2012), alto nivel de colaboración (Kramer et al., 2007;Dezsö y Ross, 2012;Javidan et al., 2016), mayor creatividad (Hillman et al., 2007;Dezsö y Ross, 2012) y, por último, un mayor compromiso organizativo (Hillman et al., 2007;Dezsö y Ross, 2012). Es interesante que varios autores concuerdan en destacar aspectos relacionados con las habilidades blandas en la gobernanza corporativa de las mujeres, las cuales pueden favorecer su presencia en el directorio. ...
... Autores como Kramer et al. (2007) destacan que el número de mujeres cualificadas en un directorio sí importa. De acuerdo con la teoría de la masa crítica, dichos autores sostienen que, si bien una sola mujer puede hacer contribuciones sustanciales y dos mujeres suelen ser más poderosas que una, aumentar el número de mujeres a tres o más puede provocar un cambio funda-mental en la sala de juntas y mejorar la gobernanza corporativa. ...
El presente estudio analiza el efecto de la presencia de la mujer en el directorio sobre el riesgo de la empresa, considerando una muestra de 15 empresas mineras que cotizan en la Bolsa de Valores de Lima (BVL). La estimación se realiza utilizando un modelo dinámico, con el objetivo de corregir una posible endogeneidad. Los resultados obtenidos muestran una evidencia significativa, pero no robusta, de la presencia de la mujer en el directorio sobre el riesgo de la empresa. Lo anterior puede deberse a que la presencia de la mujer en el directorio todavía es escasa y esta no tiene impacto en la toma de decisiones. El efecto de la diversidad en el directorio sobre el riesgo de la empresa ha recibido especial atención durante la última década. Para el caso peruano, no hay antecedentes sobre estudios similares, lo que representa un aporte importante, dada la relevancia de esta actividad económica para el país, así como su posición en la producción de importantes minerales, como el cobre y el oro.
... The critical mass theory on board gender diversity is an extension of the token status theory, positing that "one is a token, two is a presence, and three is a voice" (Kristie 2011). "The magic seems to happen when three or more women serve on a board together" concluded by Kramer et al. (2006) who expected that having three or more women on a board of directors can produce a critical mass where women are no longer perceived as outsiders and can have an impact. It acknowledges the unique viewpoint and skills that women can contribute to a company. ...
... Token status theory can be applied to the study of gender diversity in the board of directors of a company by examining the perceived value and utility of having women represented on the board. According to token status theory, the status of a token (in this case, the token being a woman on the board) is determined by its perceived utility, rarity, and liquidity (Kramer et al. 2006). ...
... The results appear to be in line with empirical studies by Kanter (1977), Kramer et al. (2006), Kristie (2011), Catalyst (2013), Strydom et al. (2016), Brahma et al. (2021), Garanina and Muravyev (2021), and Carmo et al. (2022), as well as the critical mass theory, which postulates that while women may have been a minority or token before reaching the critical, the return on assets (ROA) and earnings per share are typically used in these studies to evaluate the financial performance (EPS). Our results were at odds with ideas that contend that there is a direct correlation between gender diversity and financial performance. ...
This study mainly aims to test the impact of gender diversity on a firm’s performance. Namely, the non-linear and the quantile impact on the listed companies in Palestine Exchange during the period 2010 to 2020. The study also aims to determine the impact of a firm’s internal characteristics on gender diversity. The study uses instrument analysis, traditional panel models, and quantile regression to fulfil the aims. The results demonstrate the existence of a critical mass for the impact of gender diversity on firms’ performance and that mass is about 30% for the ROA and 41% for the EPS.
... Female directors tend to take into account the needs of a wide range of stakeholders [21]. This allows companies to attract a wider range of prospective customers and better penetrate various markets [22]. ...
... Besides, there is also evidence of a non-linear relationship between the number of female directors and financial performance; the presence of one or two "token" women on a board is associated with poorer firm performance, whereas the presence of three or more women (reaching a critical mass) is associated with improved firm outcome (for e.g. see [7,21,30]). ...
... According to critical mass theory based on Kanter [78]'s work, only when a company's board of directors reaches a critical mass or threshold, women will be able to provide unique perspectives, ability, and skills and hence positively influence group culture and performance. Some of empirical results also show that an absolute number of at least three female directors participate on board is necessary before significant power can be exercised over board activities and significantly affect the dynamics and processes inside the board [21,30]. Besides, unless a critical mass of at least three women is present on a board, female presence on boards appears to have little impact on governance performance [30]. ...
Society’s expectations for business are higher than ever. Younger generations believe that organizations that are environmentally and socially conscious are better places to work and the vast majority believe that they will be more loyal to companies that share their values. The responsibilities placed on leaders grow in tandem with the need for social accountability. Gender diversity on corporate boards has been identified as one of the most important drivers of sustainability as well as corporate social responsibility (CSR). Nevertheless, there are the mixed empirical evidences to back up this claim. To fill this void, the purpose of this chapter is to provide readers with a brief overview of theories and empirical evidence supporting the relationship between female directors and CSR. Besides, the chapter attempts to gather the main conceptual contributions on the situation and evolution of the relationship, providing insights regarding future studies.
... For example, corresponding to the critical mass theory, Konrad et al. (2008) claimed that three women or more in the board would better affect board decisions. Furthermore, this theory suggested that the existence of fewer than three women is not sufficient to make a change (Kramer et al., 2006). Hence, three or more women in the board will improve the company's innovation (Torchia et al., 2011), enhance companies profitability (Joecks et al., 2013), and increase firm value (Gyapong et al.,2016). ...
... Concurring to the critical mass theory, Konrad et al. (2008) argued that three females or more in the boardroom would better influence board decisions. Moreover, this theory recommended that the presence of fewer than three females is not enough to make a change (Kramer et al., 2006). ...
... Concurring to critical mass theory, three or more women on the board would better impact board decisions (Konrad et al., 2008) and increase firm value (Gyapong et al.,2016). Also, when they are fewer than three women, they may be scared to reveal their opinion, and they will be a token (Kramer et al., 2006). Previous research (Bear et al., 2010;Post et al., 2011;Fernandez-Feijoo et al., 2014;Liao et al., 2018;Cabeza-García et al., 2018;Cook and Glass, 2018) support this argument and they found that the presence of three women or more in the board would improve the level of CSR. ...
Purpose
This study aims to provide the intellectual structure of the academic literature on board characteristics and corporate social responsibility disclosure (CSRD) and corporate social responsibility performance (CSRP). To do that, the authors analyse the main theories, data sources and methodologies used by researchers, providing information on methodological bias and research gaps. Beyond that, this study offers a novel picture of the most critical drivers of CSRP/CSRD and offer constructive suggestions to guide future research.
Design/methodology/approach
A content analysis was performed on 242 articles extracted from the Web of Science database from 1992 to 2019.
Findings
Results indicate that board characteristics have a significant and increasing impact on corporate social responsibility (CSR) literature. The results also revealed that the board practices play a crucial role in managing CSRP/CSRD-related issues. The study also identifies the effect of the critical board characteristics on CSRP, CSRD quantity and CSRD quality. Furthermore, the study findings provide an overarching picture of the patterns and trends of the systematic nexus between board characteristics and CSRP/CSRD quality and quantity.
Practical implications
The study findings help provide an overarching picture of the systematic nexus patterns and trends between board characteristics and CSRP/CSRD quality and quantity. These results draw potential future avenues to bridge the void in the current board–CSR literature by presenting fruitful and indispensable directions for future research (governance mechanisms, new methodologies, variables, countries, etc.). It also suggests multidimensional and in-depth insights for reforming the board of directors’ guidelines.
Originality/value
To the best of the authors’ knowledge, minimal attention has been paid to systematising the literature on board and CSR.
... Indeed, prior research suggests that women only positively affect firm outcomes when sufficiently represented on boards (Abebe & Dadanlar, 2021;Konrad et al., 2008;Kramer et al., 2006). Therefore, beyond the representation of women in boardrooms, we contend that their impact on employment might be dependent on whether there is a critical mass of female directors to democratically influence decisionmaking in the boardroom. ...
... Similarly, the likelihood of downsizing significantly declines when there are three or more women on the BOD. Overall, these results support the view (i.e., H4) that female directors' influence on employment decisions (including the likelihood of downsizing) is more pronounced in the absence of tokenism (Abebe & Dadanlar, 2021;Kanter, 1977;Kramer et al., 2006;Smith & Parrotta, 2018;Torchia et al., 2011). ...
While corporations play a pivotal social role by creating employment opportunities, managers typically boost profitability during economic downturns by downsizing. Using a panel of US-listed firms from 2007-2016, we explore the impact of female representation on the board of directors (BOD) on firm-level employment. We find that firm-level employment increases while the likelihood of downsizing decreases with BOD female representation. In corroboration, the level of under-staffing, and hence its associated problems, reduces with BOD female representation. The impact of female directors on employment is stronger in the absence of tokenism, more evident during downturns and shaped by female director typology. Importantly, we find that, while over-staffing problems might emerge, overall employee productivity improves with female representation, suggesting that female directors do not sacrifice shareholder value in pursuit of employee interests. Overall, our results suggest that female directors are crucial in promoting employment in society.
... In the context of corporate governance, prior research provides evidence that board gender diversity, i.e., presence of females on the board, is positively associated with voluntary CSR disclosures (Boulouta, 2013;Liao, Luo & Tang, 2015;Rao & Tilt, 2016;Glass, Cook & Ingersoll, 2015;Cabeza-Garcia, Fernandez-Gago & Nieto, 2018). Bear et al. (2010) further find that the positive association is reinforced when there are two or more female board members, aligned with previous findings that a critical mass of female board members is needed for ethical decision making (Kramer, Konrad & Erkut, 2006). Taken together, prior evidence provides consistent support regarding the social role of women, especially in the form of more ethical decision making by female board members. ...
... Next, we explored whether there is a critical mass threshold for gender diversity to have any significant effect on the association between CPDs and CSR disclosures. Previous research suggests that female board members may influence board decisions when there is more than one woman in the board (Kramer et al., 2006). To test this possibility, we created two dichotomous variables: FEM1 is coded 1 if there is one woman on the board and 0 otherwise; FEM2 is coded 1 if there were at least two women on the board and '0 ′ otherwise. ...
We examine the association between corporate political donation (CPD) and the quality of corporate social responsibility (CSR) disclosures by the Australian Stock Exchange (ASX) listed firms. We also explore the effect of board members’ gender diversity on this association. Consistent with the neo-pluralist theory of the state, we report a negative association between corporate political donation and the quality of CSR disclosures. Hence, corporate political donations assist in reducing legitimacy threats and act as an alternative strategy to maintain legitimacy instead of engaging in CSR related activities. Furthermore, consistent with the social role and legitimacy theories, we report that board gender diversity moderates the association between political donations and CSR disclosures. We also find that it requires more than one female director to moderate the association between CPDs and CSR disclosures which provides support to critical mass theory. Our additional analysis reveals that the negative association between CPDs and the quality of CSR disclosures is stronger for the resource industry, and the proportion of female directors has an insignificant effect on this association.
... Therefore, the presence of women on boards may positively affect market analysts' evaluation, which increases firms' market-based performance. As female leaders are more democratic and collaborative than their counterparts, the high ratio of female directors may decrease the cost of decision-making and alleviate communication problems on the board of directors (Cook and Glass, 2014;Eagly and Carli, 2003), thereby boosting firm performance (Kramer et al., 2006;Cruz et al., 2012). In the specific context of East Asian countries, the connection between better firm performance and women's engagement in business may be explained by collectivism culture and support from their family (Nguyen et al., 2021a). ...
... By integrating panel data analysis and fsQCA, the relation between corporate governance and firm performance was uniquely illustrated. Gender diversity was expected to alleviate the cost of decision-making (Cook and Glass, 2014) and improve the quality of decisions (Cruz et al., 2012), communication amongst executives (Kramer et al., 2006; and the legitimacy of corporate governance (Hillman et al., 2007). Although the panel analysis rejected both H1a and H1b, fsQCA showed that high gender diversity led to a high accounting-based performance in combination with no dual leadership, low ownership concentration and high board size (Configuration 1); however, high gender diversity was also associated with the growth opportunities of firms when combined with non-CEO duality and low ownership concentration (Configuration 2). ...
Purpose
Corporate governance plays a critical role in solving agency problems. However, previous findings on how governance mechanisms lead to high firm performance are inconclusive. Additionally, this relationship has not been well addressed in the context of transitional countries where governance systems and mechanisms are weak, leaving a gap for research. Hence, this study aims to shed light on the effects of four key governance components, namely, ownership concentration, chief executive officer duality, board size and gender diversity, on firm performance.
Design/methodology/approach
This study reports on the econometric panel data analysis and fuzzy-set qualitative comparative analysis (fsQCA) of 1,424 firm-year observations from listed companies in Vietnam covering the period of 2010–2017.
Findings
The econometric panel data analysis confirmed the net effects of single solitary governance components. FsQCA revealed equifinal configurations of components that explain high firm market- and accounting-based performance.
Practical implications
These findings are relevant for firms in transitional and emerging markets, aiming to adopt the most suitable internal mechanisms to pursue their performance objectives and for regulators interested in enhancing the advantages of the capital market.
Originality/value
This study provides empirical evidence that firm performance can be improved when the appropriate corporate governance mechanisms are selected. As there are equifinal paths leading to the desired outcome of high performance, firms from different industrial and national contexts should mindfully apply any uniform corporate governance code.
... Kristie (2011) states "one is a token, two is a presence, and three is a voice". Developed from token status theory, critical mass theory views female directors as a subgroup of the board which merely influence firm performance when their size reaches a critical number (Kramer, Konrad, Erkut, & Hooper, 2006). Specifically, Kramer et al. (2006) and Liu et al. (2014) document that boards with at least three female directors tend to outperform others. ...
... Developed from token status theory, critical mass theory views female directors as a subgroup of the board which merely influence firm performance when their size reaches a critical number (Kramer, Konrad, Erkut, & Hooper, 2006). Specifically, Kramer et al. (2006) and Liu et al. (2014) document that boards with at least three female directors tend to outperform others. Based on these literatures, we state the hypothesis concerning the number of female directors on board as follows: ...
The quality of health care and the quality of health facilities are a closely watched issue in all developed countries. The quality is reached when following certain standards while providing health care and an overall quality management system, which includes an assessment of clients’ satisfaction with services offered by medical facilities. Health facilities need to realize that quality is one of their main competitive advantages. The quality of health care can be improved in many ways. One of them is the systematic improvement of skills of young, inexperienced doctors in the form of controlled postgraduate training in hospitals by providing so-called adequate education and guidance (or supervision and counselling) by experienced doctors. The paper wants to highlight the possibilities of improving health care by means of the system of postgraduate education of doctors in the Czech Republic. The aim of the paper is to present the need for quality postgraduate education of young doctors and follow-up research, aimed at improving the existing postgraduate education. From the point of view of methodology, the contribution is based on quantitative research, which was carried out using a questionnaire survey of 98 respondents in all types of medical centres of the Czech Republic (district, regional, faculty hospitals and private medical facilities). In the final part, the recommendations not only for improving postgraduate education are stated, but also initiatives and proposals for further research activities in the context of improving health care and reducing health care costs are made.
... 19 This failure represents a loss not only of intellectual capital 20,21 but also of a leadership style that often offers a broad perspective and innovative approaches. [21][22][23][24][25] Now in its 13th year, the Hedwig van Ameringen Executive Leadership in Academic Medicine (ELAM) Program for Women, within the Institute for Women's Health and Leadership at Drexel University College of Medicine, provides executive leadership training to women faculty at the associate or full professor level at schools of medicine, dentistry, and public health (www.drexelmed.edu/ELAM). 18,26 This study addresses the following question: Does participation in the ELAM program enhance the leadership and career development of women faculty and their readiness to take on the challenges of leadership, compared with women from two comparison groups? ...
... These results may indicate that academic health centers are at risk of losing the intellectual capital of this group of accomplished senior women faculty. 20,21,30 Similar studies comparing the leadership aspirations of men and women faculty over time are warranted. 31,32 Our study also emphasizes the many challenges in attempting to evaluate prospectively the impact of a leadership program. ...
... Spangler et al. (1978) asserted that, due to the minority of women directors on boards, the pressure of performance, the communication gap, and role entrapment, the achievements of females on the board are diminished. Following critical mass theory, Kramer et al. (2007) proposed that female directors are considered more powerful when there are three or more on boards. Kristie (2011) recommended that the participation of one female director on board is token, two is presence, and three or more become voice. ...
... 8 The above findings provide support for H3 that a subsequent increase in the number of the female also increases the dividend payouts. Theoretically, our findings are compatible with Kramer et al. (2007) and Kristie (2011), who suggested that having three or more females on the board provides the greatest impact. Empirically, our results also support previous studies (Ahmed & Ali, 2017;Liu et al., 2014). ...
This study investigates the relationship between gender diversity on the board and dividend payouts in China using a large sample over the period 2003–2017. Our results provide robust and strong evidence showing that gender diversity on the board is positively associated with cash payments of dividends. The empirical outcomes confirm that gender diversity on the board facilitates corporate governance and subsequently promotes dividend payouts. We demonstrate that gender diversity on the board has the greatest effect when the board has critical mass participation (three or more female directors) compared with only their token participation. However, independent female directors increase dividend payouts, while female executive directors do not have a significant impact. Furthermore, we extend the literature on the relationship between dividend payments and government ownership by providing evidence that gender diversity has a higher impact on dividend payouts for state-owned enterprises than non-state-owned enterprises. After controlling the endogeneity problems, our findings are reliable and robust.
JEL classifications: G30, G35
... Kanter (1977) reported that, due to maledominated boards, the achievements of female directors are diminished as a result of their low participation. Following critical mass theory, Kramer et al. (2007) proposed that women directors are considered more powerful when there are three or more on boards. Kristie (2011) recommended that "participation of one female director on board is token, two is presence and three or more become voice." ...
... The outcomes are reported in Table 6, using all measures for innovation, and show the significant impact of FD3 when we used PAT_APPL, INV_APPL and DES_APPL as the dependent variable. Theoretically, our findings are compatible with those of Kramer et al. (2007) and Kristie (2011), who suggested that three or more females on boards provide the greatest impact. The results for QFIIs were the same as before and provided insignificant results. ...
Abstract
Purpose
This study investigates the impact of board gender diversity and foreign ownership on innovation in Chinese firms.
Design/methodology/approach
The authors use data for Chinese manufacturing firms listed on the Shanghai and Shenzhen stock exchanges, for a sample over the period 2008–2017. Ordinary least square (OLS) is used as the baseline methodology, with cluster OLS, two-stage Heckman test, Blau index and Shannon index used to address endogeneity issues.
Findings
The results show that gender diversity on the board has a positive effect on corporate innovation as measured by the total number of patent applications, invention patent applications, utility model patent applications and design patent applications. Our findings also provide support for the critical mass participation of female directors on the board being associated with more innovation. They also reveal that innovation output does not vary across state-owned enterprises (SOEs) and non-SOEs. These outcomes reveal that SOEs' advantages, such as easy access to funding and more support of government, are likely offset by their disadvantages, such as different goals and having more agency issues. Because of intense political power and networks in Chinese firms, qualified foreign institutional investors (QFIIs) are less motivated to enhance innovation activities.
Practical implications
This study highlights the role of board gender diversity in enhancing innovation among Chinese manufacturing firms. Our findings provide support for regulatory bodies' role regarding women's participation on the board.
Originality/value
This research adds to literature by addressing the largely ignored questions of whether providing a gender-diverse board enhances innovation, whether critical mass participation has a greater effect on improving firm innovation and whether the influence of women directors varies with ownership structure.
... The findings here, combined with the findings of the baseline regressions, suggest that female board representation is an important channel through which social trust affects firms' ESG performance. Intuitively, Columns 3 and 4 show that the positive impact of social trust on ESG is mainly contributed by the non-independent female directors, which echoes our findings in Panel A. KRAMER et al. (2006) argue that female directors are considered more powerful when there are three or more of them Table 6 Social trust and different types of directors Panel A presents the results of social trust and different types of directors. We define independent female directors, Female_Ind i,t , as the proportion of independent female directors. ...
The underrepresentation of females on corporate boards is an important ethical issue that raises serious concerns about gender equality in senior management teams. Relying on a large sample of public firms from the Chinese market, we examine how social trust affects female board representation. We find that female board representation has a positive and significant relation with social trust. The effect is more pronounced in regions with a higher male-to-female sex ratio at birth, lower levels of education, lower GDP per capita, and in nonfamily firms. We also find that higher social trust is more likely to increase the number of non-independent female directors rather than independent ones. Further analyses show that increased female board representation is an important channel through which social trust improves corporate ESG ratings. Overall, our study suggests that social trust contributes positively to gender diversity in corporate management.
... Token theory and critical mass theory advocate that female directors (those in leadership positions) are ineffective in the absence of a critical mass of women in an organization. The critical mass theory postulates that a certain number of women in a group are required to make a difference (Dahlerup, 2006); this number is generally regarded as three, or 30% of the group (board) composition (Kramer et al., 2006). This implies that the smaller the representation of women directors on the board, the less effective they are (Arena et al., 2015). ...
Purpose: This article’s primary purpose is to present and analyze the current state of board gender diversity and elaborate on the relatively sparse literature in this field in the Czech Republic, a post-transition Eastern European economy. The described study sought to identify and comment on the theoretical views concerning previous research in other, mainly Western European countries, by highlighting new perspectives on board gender diversity. Design/methodology/approach: The study’s empirical analysis was based on 235 companies domiciled in the Czech Republic with 500 or more employees. We followed a selection protocol consisting of several filters in arriving at our final sample. We initially analyzed the data in relation to (a) the number of employees, (b) organization turnover, and (c) industrial classification. We calculated the mean (μ), standard deviation, (σ), and coefficient of variation (CV) of the data/variances, then tested our hypotheses through χ2, determining the significance through the p-value. Finally, we calculated the board diversity index (DI) for female/male board members. Findings: Our findings showed that the representation of women on corporate boards of Czech Republic companies is well below the European directive target figure of 40%. There is a greater representation of women on supervisory than on statutory boards. Moreover, the research revealed that female directors are more likely to serve on boards of companies in health care, social, wholesale, retail, and administration sectors compared to the construction, manufacturing, transportation, and storage sectors. Furthermore, company turnover also plays a part in board gender diversity. Finally, we highlighted many reasons why the Czech Republic is a fertile ground for the study of board gender diversity. Practical implications: We believe this article will be valuable to senior managers in industry and wider regulatory, corporate governance, and ethical environments, fostering diversity and equality on corporate boards. This article forms a sound foundation for future studies on board gender diversity in the Czech Republic and contributes to the ongoing discussion on any adoption of possible future quota. Originality/value: This research presents a rare insight into the current board gender diversity structure in the Czech Republic, especially because the country is relatively under-researched in the corporate governance and gender diversity literature. Thus, the research adds to the theoretical views concerning earlier research undertaken in other, mainly Western European countries, highlighting new perspectives on board gender diversity.
... Extant research has suggested that these reforms are associated with corporate outcomes, such as monitoring power (Hillier and McColgan, 2006), firm performance (Price, Román and Rountree, 2011), dividend policy (Bae et al., 2021), bank versus public debt choice (Ben-Nasr, Boubaker and Sassi, 2021), corporate risk-taking behaviour (Koirala et al., 2020) and cash holdings (Chen et al., 2020), among others. A significant reform that influences the composition of boards is with regard to gender diversity, since a growing body of studies have indicated positive corporate outcomes from firms with gender-diverse boards, such as improved performance (Erhardt, Werbel and Shrader, 2003), less asymmetric information (Gul, Srinidhi and Ng, 2011), enhanced problemsolving and board advisory effectiveness (Hillman and Dalziel, 2003), enriched legitimacy of corporate practices (Hillman, Shropshire and Cannella, 2007), increased monitoring of managerial performance (Kramer, Konrad and Erkut, 2006), among others. Also, gender differences on boards have shown societal improvements through ethical standards and corporate social responsibility (Cohen, Pant and Sharp, 1998;Ibrahim, Angelidis and Tomic, 2009;Nave and Ferreira, 2019), which ultimately decrease the probability of corporate financial malpractice/fraud (Cumming, Leung and Rui, 2015;Dimungu-Hewage and Poletti-Hughes, 2022;Wahid, 2019;Wang, Yu and Gao, 2021) and increase environmental and social performance (Orazalin and Baydauletov, 2020). ...
This study examines the impact of board gender diversity reforms (i.e. voluntary and regulatory) on both their effectiveness in increasing independent female directors on boards and board independence in a sample of 41 countries (10,313 unique firms and 82,613 firm‐year observations). In an initial analysis, we find that voluntary self‐regulation via a comply‐or‐explain reform decreases the number of independent female directors on boards and board independence. However, after incorporating the moderating effect of national culture, we find that such comply‐or‐explain reforms are ineffective only in countries where the inclusion/role of women in labour markets is limited (i.e. familial culture). By contrast, quota reforms boost the appointment of independent female directors and board independence despite the cultural setting, signifying positive actions towards good corporate governance practices.
... where board gender diversity is defined as firms with at least one female director. However, prior studies suggest that having only one female director on the board may often serve as tokenism (e.g., Kramer, Konrad, and Erkut 2006;Bourez 2005). Also, having only one female director on the board may not be sufficient for gender diversity, especially for large boards. ...
We examine whether gender diverse boards prioritize product market concerns over capital market incentives when proprietary cost is high. Using a matched sample of the United States (US) listed companies and difference-in-differences research designs, we find that firms with gender diverse board experience higher adverse selection cost relative to similar firms with all-male board when the firm faces high competition or redacts disclosure of proprietary information from its material contract filings. Collectively, our results suggest that when proprietary cost is high, gender diverse boards strategically prioritize product market concerns by refraining from disclosure of proprietary information, relative to an all-male board, to protect shareholder interests and reduce risk exposure from loss of proprietary information to competitors.
... In fact, Hill et al., [104] indicated that Saudi Arabia comes last among countries, with only 0.1% of board seats found to be occupied by females. Kramer et al., [105] revealed that if female directors on the board are less than three, this will restrict those females from becoming involved in the board processes. One problem, that is still challenging to overcome and may require some cultural adjustments to be removed, is the perceptions of roles in a male-dominated field. ...
There is an evolving trend of pursuing the transfer to sustainable development. Owing to this trend, and alongside the increasing monitoring by society, companies are progressively considering this new position in the capital market. Corporate governance mechanisms and environmental, social, and governance (ESG) activities have received extensive consideration. Using a sample of Saudi listed companies, this study examines the association between board composition (size, independence, and gender diversity) and ESG disclosure moderated by corporate governance reforms. Our reported results confirm that the size of a board and its level of independence have positive and significant impacts on ESG disclosure. Moreover, board gender diversity is found to be positively but insignificantly related with ESG disclosure. When the individual dimensions of ESG are considered, the results verify the significant role of board size and board independence and the insignificant impact of board gender diversity in environmental and social disclosures. Interestingly, all measures of board composition have a positive and significant impact on the governance disclosure score. The results also show that reforms of Saudi corporate governance positively and significantly moderate the board size and board independence–ESG relationship. Our results demonstrate that the enhancement of companies’ corporate governance will increase their ESG disclosures. This study offers perceptions from the outlook of a developing economy, Saudi Arabia, and presents theoretical and managerial implications for policymakers and investors.
... The literature suggests that female presence is only fruitful when the number of females on board is greater than one (Kramer et al., 2006). The results of critical mass are presented in Table 6. ...
The study aims to explore the role of gender diversity in debt financing choices among Chinese listed firms. The study used the Chinese listed firm's data from 1991 to 2022 from the Chinese Stock Market return. The study used the fixed effect regression analysis and revealed that gender diversity positively affects debt financing among Chinese firms. Additionally, mass theory results suggested that at least three females on the board significantly influence firms. It served as the voice of gender diversity to influence the board's decisions regarding debt financing. The study has several theoretical and practical implications. This study will enlighten the Chinese boardroom dynamics by reassuring them to add more females to diversity policies. It will benefit future studies on boardroom activities and debt financing in emerging economies. It will be practical guidance for the Chinese policymakers, governing authorities, and corporate executives. The study stresses the need for significant diversity on the board rather than one female presence on the board. Secondly, this study contradicts the stereotype perception that females are not making risky decisions.
... Nevertheless, their opinions can be rejected by the stronger group (e.g., male directors, Amorelli & García-Sánchez, 2020). To address this issue, increasing the number of WOB provides them with certain discretion to influence firm-level decisions (Kramer et al., 2006). Thus, grounded on critical mass theory, we suggest that WOB only influence the firm's efficient risk-taking when enough women are on board (Ben-Amar et al., 2017). ...
This article aims to understand the impact of board gender diversity (BGD) on the firm's deviation from efficient risk-taking (DERT) along with the mediating effect of sustainability reporting and the moderating effect of CEO overconfidence. The sample consists of 77 South Asian agri-food firms over the period 2010–2019. To account for endogeneity and other statistical biases, we use a system GMM approach. The results show that there is a non-monotonic relationship between BGD and DERT. Consistent with critical mass theory, we find that at least three women on board (WOB) are required to reduce the firm's DERT. The findings of the study also reveal that the overconfident CEO may restrict the female directors to achieve the firm's efficient risk-taking. The evidence further suggests that sustainability reporting quality (SRQ) does not mediate the link between BGD and a firm's DERT. The robustness tests are performed based on alternative risk proxy and the likelihood of financial distress. Our results theoretically support stakeholder, critical mass, and agency perspective that South Asian capital markets should enhance the representation of WOB to mitigate agency conflicts and to improve long-term firm sustainability.
... Previous studies indicate that the female top executives or directors in firms with predominant male counterparts significantly improve the corporate decisionmaking process and thus bringing positive impacts to firm's financial performance among other things (see, e.g., Barua et al., 2010;Huang & Kisgen, 2013;Faccio et al., 2016). The improved financial performance with higher female directors has suggested that women corporate participation greatly improve corporate governance practices (Kramer et al., 2006). Many studies also suggest that female directors are more risk-averse and serve effectively as a check and balance and monitoring mechanism in the board decision making process that could lead to better decisions are being made in the boards (Perryman et al., 2016). ...
This study examines the relation between corporate diversification and stock price crash risk and whether female directors moderate this relation. Using a sample of Malaysian publicly listed firms based on 2010–2016 data, our study finds diversification mitigates crash risk but only for highly diversified firms. Our study also finds that the mitigating effect of diversification is more pronounced for firms with higher proportion of female directors in the board in which it is aligned with the notion of gender diversity in promoting good corporate governance. Our findings are beneficial to stock investors in managing the “tail risk” in stock prices of conglomerates/diversified firms.
... Azmi and Barrett (2013) highlighted that the effects of having women directors become more significant when certain thresholds, i.e., three or more, are reached. Kramer et al. (2007) suggested that a board with higher women participation is more dynamic, supportive, and collaborative. It will also make women directors more comfortable to discuss and share their views and hence increase their effectiveness (Elstad & Ladegard, 2012). ...
In its initiative to promote gender equality, the government of Malaysia had imposed a 30% quota in 2011 for women to be part of the decision-makers in the corporate sector. This paper examines the evolution of women's directorship on corporate boards in Malaysia, as well as their respective profiles from the perspective of academic qualification, independence, commitment, industry experience, financial background, and multiple directorships during the pre-and post-quota period. The findings indicate an increase in the women's representation on corporate boards from 2010 to 2018. A closer look into the women directors’ profiles indicates that there was a positive shift from the pre- to post-quota from the perspective of academics, independence, commitment, industry experience, financial background, and multiple directorships. In other words, the appointment of women directors in Malaysia has generally been made based on quality, not just to make up the numbers in the quota.
... In line with this argument, Torchia et al. (2011) and Cheng and Groysberg (2020) state that only a critical mass of women directors (three or more) can really influence board operation and the level of firm innovation. Kramer et al. (2007) conducted interviews with board members in order to investigate the impact women have on corporate boards, and they found that corporations with three or more female directors on the board can benefit the most from women's contribution. Furthermore, Liu et al. (2014) and Brahma et al. (2020) point out that a critical mass of three or more female directors positively influences financial performance. ...
In recent decades, the contribution of board gender diversity to corporate performance
has drawn the interest of researchers, politicians and regulators. This paper examines whether board gender diversity affected the financial performance of 111 Greek listed firms from 2008 to 2020. We use the two-step system GMM estimator to address the endogeneity problem, which is the appropriate method used in governance literature. Our main empirical finding supports the existence of a positive relation between board gender diversity and firm performance. This finding remains robust to three different proxies of gender diversity and under two alternative performance measures, i.e., return on assets and Tobin’s Q. We also find that there is an inverted U-shaped relation between the proportion of female directors and firm performance (measured by Tobin’s Q). Moreover, we find that gender diversity could lead to maximization of corporate performance when female participation in the boardroom reaches 33%. Thus, the imposition of an ad-hoc 25% female representation in corporate boardrooms, dictated by the new Law 4706/2020 on corporate governance, could most probably be an underproductive policy. Our findings have practical implications for Greek regulators and legislators and contribute to the governance literature for the case of companies that operate in a small open economy.
... The critical mass theory (CMT) predicts that a minority group member will bring desired benefits of their skills and abilities if their representation meets a certain threshold. As their representation rises, the group begins to accept them and no longer perceives them as outsiders (Kramer, Konrad, Erkut, & Hooper, 2007). They are heard and taken seriously during board meetings (Joecks et al., 2013;Strydom et al., 2017), thus they begin voicing their opinions and disagree on critical issues (Terjesen, Sealy, & Singh, 2009;Torchia et al., 2011) thus effectively benefitting boards with their robust monitoring. ...
Motivated by the recent regulatory reforms, in the forms of UK Corporate Governance Code (UK CGC) in 2011 and the enaction of section 414C of the Companies Act 2006, to increase female representation on corporate boards, this study investigates the effect of boardroom gender diversity (BGD) on investment inefficiency (IE). These reforms were aimed at enhancing corporate governance by allowing a pool of female directors into directorship positions and bringing fresher and independent perspective of female directors, thus strengthening board monitoring and its internal control systems. This study therefore seeks to understand whether and how female directors align managers’ and shareholders’ interests by improving investment efficiency. Using a sample of UK listed firms from 2005 to 2018, this study provides the first empirical evidence on the impact of BGD on IE. Consistent with our theoretical predictions, we find a negative and statistically significant association between BGD and IE. Furthermore, in a difference‐in‐difference analysis, we find a significant impact of UK CGC on BGD‐IE relationship. We also identify three possible channels (board dynamics, stewardship effect and information environment) through which BGD is likely to affect IE. Finally, we also document that the said relationship is more pronounced in firms with three or more female directors, i.e., consistent with critical mass theory, and that BGD mitigates concerns surrounding both the under‐ and over‐investment decisions. Our main results are robust to endogeneity bias, alternative measures of BGD and IE and controlling for potential bias with two‐step investment estimation method. Our findings have important implications for regulators, policy‐makers and other corporate stakeholders. Most importantly, the recent policy initiatives on improving representation of female directors can strengthen board monitoring and could reduce inefficient investments.
... However, these achievements provide psychological benefits, such as rewards for the position [16]. Studies in Singapore show that investors with good gender insight are optimistic about the presence of women on the board [28,8]. Another finding states that companies led by female CEOs have superior performance than companies led by male CEOs [20]. ...
The purpose of this study is to determine the effect of female board of directors on company performance. Using a sample of 144 family firms in Indonesia in the period 2018 to 2020. This study examines the relationship between female directors and corporate accounting (ROA and ROE) and market-based performance (Tobin's Q). This study uses a panel data approach with OLS measurements and fixed effects model measurements. This study found that female ownership significantly lowers Tobin's Q. While female CEOs have a negative effect on ROA. Furthermore, the ownership and presence of women on the board has no effect on ROA. In measuring company performance as proxied by ROE, it was found that women's ownership, the presence of women on the board, and women's leadership had no effect. Studies on the relationship between gender diversity and financial performance in the context have been carried out in developed economies. This study contributes to the literature related to corporate governance in family companiexs, especially gender diversity in countries with developing economies such as Indonesia. we recommend looking at the role of women in risk and innovation to be able to see the role of opportunities in other fields that can provide evidence that women can advance the company.
... This aligns with research that has found that organisations with at least 30% representation of women and men on their boards outperform those with a skewed representation (Joecks, Pull, & Vetter, 2013), and that women have more confidence to speak up and raise issues when there are at least three women on the board (Kramer, Konrad, & Hooper, 2006). ...
Within this chapter I explore how national policy that influences gender equity in English sport governance has developed over time. This includes a discussion on the impact of domestic equal treatment legislation and women and sport activism on the development of gender-related governance policy within the sector. I draw upon Pierre Bourdieu's theory of practice to aid analysis of the effectiveness of top-down policy in creating transformational organisational change in the sector. I conclude that the extent to which sport governance policy has created transformational change within national governing bodies (NGBs) is uncertain. Some short-term success has been seen with increased average female representation across the boards of NGBs, but internalisation of the value of equitable, diverse, and inclusive governance appears to be lacking.
... Additionally, women feel they are belonging to the same group so they can feel less isolated. Although two female directors are generally more powerful than one, it takes three or more women to achieve the critical mass that can cause a fundamental change in the boardroom and enhance corporate governance [42]. In a similar vein, Post et al. [43] also suggest that the number of female directors matters. ...
Gender diversity in the workplace has been an issue receiving a tremendous amount of attention both in academia and in the popular press. The research to date has tended to focus on the obstacles to promotion of women at lower and middle management levels, often referred to as a glass ceiling effect. However, most research on the subject has been mainly restricted to the definition of gender, by biological determination, that is, male and female, rather than by social construction. This chapter addresses the impact of gender diversity leadership and firms’ performance. In addition, it offers a synopsis of selected research examining the LGBT-supportive workplace policies and firms’ outcomes. Further, the chapter identifies priorities for future research that can advance our understanding on this research area, and the broader field of financial studies, encompassing the growing interest in the boundaries between the economic, the psychological and the social areas.
... Third, research on influence and conformity in groups indicates that three women may be particularly beneficial for creating change. Similarly, Kramer et al. (2006) observe that a critical mass of three or more women may lead to a fundamental change in the boardroom and enhance corporate governance practices. ...
Based on the resource dependence theory and the ethics of care theory, this study aims to analyze whether female representation on boards enhances corporate ethics performance in listed companies. Using a study sample composed of 1,285 company‐year observations from Argentina, Brazil, Chile and Mexico during the 2004‐2014 period, empirical results reveal a positive effect of female representation in boardrooms over the board’s ethical functioning, the conflicts of interest transparency index, the creation of ethics codes, and the adoption of a stakeholder orientation. Moreover, the research evidences a greater effect in some ethical dimensions when women on the board make up a critical mass of three women. This paper motivates the ethical side of corporate governance in a setting where women’s rates on top positions are low, corruption and bribery are high and cultural environment inhibits gender parity in terms of reaching higher positions in an organization. It can be specifically deduced that a higher female representation as board members may have an essential role in establishing and advocating a business ethics culture. For boards, having more female directors can enhance corporate ethical practices. For practitioners and regulators, this study shows that female directors tend to be more ethically responsible, emphasizing the necessity of mitigating gender imbalance on corporate boards.
... It also implies that similar efforts could be made in other sector (financial services) of the Nigerian economy in reducing tax liabilities by taking advantage of tax planning activities.Result on gender diversity provides evidence to interested parties that the presence of women on the board of directors does not enhance tax planning activities. It has been observed byKramer, Konrad, and Erkut (2006),Lakhal, Aguir, Lakhal, and Malek (2015) that women may be placed on the board as tokens to channel no real value to the board. As tokens, companies may slightly improve gender diversity of the board to satisfy increased support for boardroom diversity. ...
... Most gender diversity initiatives are based on the view that the presence of women can significantly promote the governance efficiency of companies. For example, gender diversity enhances the legitimacy of corporate practices (Hillman et al., 2007), improves firms' ability to monitor CEOs' performance (Kramer et al., 2006), facilitates work across cultures, race, and ethnicities (Tavanti & Werhane, 2013), improves self-efficacy in the context of global leadership (Javidan et al., 2016), and facilitates higher-quality decisions Dezsö & Ross, 2012). Most of the arguments in favor of gender diversity state that boards should not exclude female talent because women have relatively low risk preferences and are more independent than men. ...
Using a sample of more than 1,500 Chinese listed firms over four years of observation (2015–2018), this study examines the effects of family ownership and certain features of board diversity (gender diversity, age diversity, and education diversity) on the risk-taking of Chinese listed firms. First, a two-way fixed effects regression model is proposed. Then, this study finds that the examined Chinese family firms’ risk-taking, which is measured by their Z-scores and innovation intensity, is lower than that of the nonfamily firms. This result confirms the prediction of social-emotional wealth theory. Second, a diversity index is formulated to summarize the above three dimensions of board diversity. By regressing risk-taking measures on these board diversity features, this study finds that firms with less-diverse boards take more risks. Finally, the effects of the interaction between family ownership and board diversity are explored. The results reveal that the examined dimensions of board diversity have significant influences on risk-taking: family firms with lower levels of board diversity generally take more risks than those with higher levels of board diversity. Our study contributes to the literature on risk-taking of family business and has important practical implications for motivating family business innovation in China.
... There may be multiple factors, in addition to the introduction of the above frameworks that have increased the attention paid to gender performance and the related reporting practices in companies. For example, several studies have shown that companies with gender diversity in senior management also have better financial performance (Catalyst, 2007;Deszo˝& Ross, 2008;McKinsey & Company, 2007), better organisational innovation and corporate governance, and higher financial strength (Kramer et al., 2006;McKinsey & Company, 2007;Miles, 2011). Gender diversity's positive effect also improves corporate reputation: for example, Bear et al. (2010) showed that as the number of women on a company board increases, the company's attention to the effect of its business on the environment also increases, and this improves its reputation over time. ...
Gender equality is the future towards which society and companies have to move, and it is thus essential to know what efforts organisations are making. In this paper, we analyse the transparency of multinationals in matters of gender, in accordance with the requirements determined by the global reporting initiative (GRI) and United Nations (UN). The results suggest that higher levels of gender equality support the decision to report all GRI +UN indicators, a decision that has been maintained over time and is not moderated by peer disclosure. This behaviour facilitates the inclusion of companies in different reputation lists as a consequence of a greater commitment to gender equality, although these rankings also assess the completeness of the information when considering the disclosure of the GRI+UN indicators. The effect differs according to the practices of peer firms.
... Contextually, the members of the minority gender (women directors) within a group (a board) are labelled "symbols" or "tokens" when only a marginal number of them are present. The empirical literature argues that the only woman on the board may experience the bias and limitations of tokenism and gets her ideas easily rejected (Kramer et al., 2006). However, when the size of the minority group increases to the point that it is no longer a token minority, the perspective of its member's changes qualitatively and, consequently, the board benefits from the resources women can bring to the organization. ...
Purpose
This study aims to examine the effects of board gender diversity on agency costs in non-financial firms listed on the Pakistan Stock Exchange (PSX).
Design/methodology/approach
Multiple regression analysis is used to determine the impact of board gender diversity on agency cost. The research used panel data consisting of 2,062 firm-year observations of 226 non-financial firms listed on the PSX from 2008 to 2019 to test the proposed hypothesis. In addition, the Blau and the Shannon indices were used to checking for robustness.
Findings
The results indicate that female presence on the board significantly reduces the agency cost and, hence, mitigates the principal-agent conflict. Moreover, consistent with the critical mass theory, it was found that boards with three or more female directors have a stronger impact on reducing the agency cost, as compared to two or fewer female directors on the board.
Research limitations/implications
The sample was restricted to non-financial firms listed on the PSX only; therefore, the results reflect the attributes of Pakistan’s business environment. A similar analysis in the context of other countries may generate different results.
Practical implications
The findings imply that female directors play an important role in reducing agency conflicts between shareholders and managers by enhancing monitoring through effective governance mechanisms. The policymakers, therefore, should focus on female career development and encourage professional training programmes to generate a fair, competitive environment for senior female management.
Originality/value
This study attempts to fill the literature gap in that no similar study covers the non-financial firms’ listed firms in Pakistan. The paper supports the reforms made by the code of corporate governance by making the placement of female directors mandatory on Pakistani corporate boards. Overall, support is provided for the view that regulators should favour gender quotas regarding the composition of the board management team of listed firms to reduce agency conflicts and gain shareholder confidence.
... Similarly, the positive effect of board diversity on CSR performance has been documented (Bear et al., 2010;Hyun et al., 2016;Orazalin & Baydauletov, 2020). Some researchers have found that a critical mass of women on board positions is necessary in order for women directors to exert a significant influence on corporate strategies and policies (Amorelli & García-Sánchez, 2020;Birindelli et al., 2019;Fernández-Feijoo et al., 2014;Furlotti et al., 2019;Kramer et al., 2006;Wei et al., 2017). Other authors argue that the effects of the presence of women in a company's top management positions on corporate strategies are stronger when other women also occupy other leading posts in the same company, given that, from a homophily perspective, "gender-based affinities" among them favour their empowerment and, hence, their ability to influence corporate strategies (Berger et al., 2013;Birindelli et al., 2019). ...
This paper uses a sample of 1243 international firms for the period 2013–2017 to analyse the effect that a greater presence of women in management teams has on business behaviour in relation to labour and human rights, and the mediating role of improved performance in these rights on corporate transparency. The results show that gender diversity in management teams is positively associated with performance in relation to labour and human rights, and that such a performance acts as a mediating factor by fostering a higher disclosure of information regarding these issues. The findings therefore seem to indicate that the presence of women in management teams acts as a driving force for enhanced social responsibility.
... Physical traits such as appearance and type dressing are also scrutinized when they appear for higher job positions. They usually face discrimination, as many roles are considered to be only for men, which leads them to develop more sympathy towards social considerations such as fair treatment, transparency of systems, and social activities, which benefits a wide range of stakeholders [43,44] such type of actions also strengthens the CSR performance of the organizations in which they work. The presence of women in power positions such as the board of directors also allows them to be more objective towards the existing CSR activities of the organization and they tend to be more scrutinizing towards the general CSR activities, and thus they are better able to root out any negative CSR activities. ...
The purpose of our study is to investigate the impact of women and independent directors on corporate social responsibility and financial performance. We use the fixed effect regression model as a baseline methodology. The data set includes information from 2010 to 2019 regarding Chinese non-financial companies, from which we use yearly information. The RSK rating is used for the assessment of corporate social responsibility reporting, ranging from 0 to 100, and other data are taken from the China stock market and accounting research (CSMAR) database. We use a two-stage least square (TSLS) regression model to control the possible problem of endogeneity. The empirical results show that gender diversity in boards significantly and positively affects CSR reporting. We do not find an effect due to non-executive directors on CSR reporting. The presence of non-executive directors on a board is mostly trivial in the case of China, as they do not have much influence with regard to decision making, especially related to CSR reporting. The control variables, such as board size, board member meeting frequency and leverage, are also found to have a significant effect on CSR reporting. Therefore, our results add a new aspect to the emerging literature on CSR reporting, especially in China. Furthermore, our results are robust with regard to the alternative variables under consideration. Our study has important implications. Our research enriches the existing literature on CSR and highlights the importance of female and independent directors having an impact on decisions related to the increased reporting of CSR activities. Our study contributes to the existing literature by presenting a pioneering investigation of the effect of female and independent directors on CSR reporting, as well as shedding light on the relationship in the context of an emerging economy.
... However, we argue that such a quota may not be required as women are able to influence decisions despite being outnumbered on boards in Mauritius. With an average of less than one woman per board (only 3% are women on boards with a size of 10 members on average), our finding is at odds with the prediction of critical mass theory, which states that a threshold is required to affect a population (Kramer et al., 2006). Women make their way onto boards because they are competent and do not need favor from legislators to gain directorship positions. ...
This study investigates the influence of "board gender diversity" on corporate social responsibility (CSR) over-investment and the extent of CSR reporting. The data are collected from listed companies in Mauritius for the period of 2007-2016. Content analysis is used to quantify CSR reporting in annual reports. The main finding of this study is that gender-diverse boards are associated with higher levels of CSR reporting and also with companies spending beyond the mandated requirements. This study also finds that firm size is positively associated with CSR reporting and CSR over-investment. There is no association between profitability and CSR reporting and particular industries have no impact on such relationship. The paper is among the first to consider CSR over-investment measured using objective criteria. The paper contributes to the scant literature on gender diversity in emerging economies. The findings have implications for companies and policy makers. For companies, it shows the importance of having gender-diverse boards to meet the CSR information needs of stakeholders and the expectations of society in general. Policy makers can use the findings when drafting regulations regarding board composition. ARTICLE HISTORY
... 6,7 The corporate world is increasingly recognizing the association between the growing number of women leaders and both improved financial performance and the presence of women in more key decision-making positions. [8][9][10][11] In academia, the presence of women leaders is positively associated with the advancement of women faculty, 12 and in academic medicine in particular, the long-term survival of academic health centers depends on capitalizing on the leadership abilities of all faculty, including women. [13][14][15] As medical schools have recently expanded, the need for developing and deploying such leadership capabilities is even greater. ...
Despite the increased representation of women in academic medicine, the percentage of women who ascend to the medical school deanship is still very low. In the 2009-2010 academic year, 47.8% (37,129/77,722) of the enrolled students, 48.3% (8,127/16,818) of the graduates, 34.8% (44,741/128,650) of the full-time faculty, 35.8% (378/1,055) of the associate deans, and 27.9% (117/420) of the senior associate/vice deans in U.S. Liaison Committee on Medical Education (LCME)-accredited medical schools were women; in contrast, only 13.0% (17/131) of medical school deans were women. 1,2 This percentage is far lower than the proportion of women presidents of colleges and universities (23%) 3 or law school deans (20%), 4 although it is comparable to the representation of women CEOs in the health care industry (12%). 5 A typical medical school dean still tends to be a white male who assumes the deanship in his early 50s and whose primary specialty is internal medicine. 6,7 The corporate world is increasingly recognizing the association between the growing number of women leaders and both improved financial performance and the presence of women in more key decision-making positions. 8-11 In academia, the presence of women leaders is positively associated with the advancement of women faculty, 12 and in academic medicine in particular, the long-term survival of academic health centers depends on capitalizing on the leadership abilities of all faculty, including women. 13-15 As medical schools have recently expanded, the need for developing and deploying such leadership capabilities is even greater. 14,16
... In the absence of a critical mass, women may be treated as "tokens," and their impact limited (Schwartz-Ziv, 2017). Several studies suggest that a critical mass of at least three female directors (which constitutes approximately one-third of most boards) is needed to improve the experience of women on boards and enhance their contributions to governance (Kramer et al., 2006;Konrad et al., 2008;Torchia et al., 2011). ...
Based on the notion that a diverse board takes a more balanced perspective and pays greater attention to financial reporting oversight, this paper examines the association between board gender diversity and financial reporting quality. Specifically, we study the enablers that allow women to add value to the monitoring activities in the context of limited affirmative actions to promote women on boards. We provide evidence that increased share of women on boards is associated with improved financial reporting quality proxied by reporting timeliness, earnings management, and auditor opinions. We find that in companies that do not have a sufficient number of women on boards, the critical mass effect can be replaced by the “voice” effect, i.e., it is still possible to improve financial reporting quality by having a woman chair the board.
... The literature supporting having more women on the board can be further divided into two sub-sectors, the first of which indicates that a mere increase in board gender diversity will increase firm performance. For example, Kramer et al. (2006) purported "the more the merrier" meaning that boards should not stop at having one or two women on their board. Instead, they should actively seek to increase number of qualified women as; they can enhance the quality of discussions in the boardroom. ...
Purpose
This study seeks to add more insights to the debate on “whether”, “how”, and “under which condition” women representation on the board contributes to firm performance. More specifically, the current study aims to investigate if the effect of board gender diversity on firm performance is dependent on macro factors of national cultures.
Design/methodology/approach
The authors used the generalized method of moments regression and a data set consists of 2,550 company year observations over 10 years.
Findings
The results indicated that cultural variables interact with board diversity to influence firm performance. Having women on the board in countries with high power distance, individualist, masculine and low-uncertainty avoidance culture influences the firm performance negatively.
Originality/value
The findings indicate that the effects of corporate governance structure on firm performance depends on culture-specific factors, providing support for the argument that institutional norms that are governed by cultural norms affect the effectiveness of corporate governance structure.
In times of crisis, corporate governance, particularly the gender equality aspect, is critically important. Motivated by the phrase “gender equality today for a sustainable tomorrow,” we investigate how board gender diversity affects asset redeployability, which is a key element in the literature on investment irreversibility and a predictor of a firm's liquidity, especially in the face of unforeseen events. Asset redeployability is a crucial feature of sustainability that has received surprisingly little attention in the literature. Based on a novel indicator of asset redeployability developed recently by Kim and Kung, our results suggest that greater board gender diversity leads to greater asset redeployability, implying that female directors value asset redeployability. The findings significantly support the argument that female directors have lower risk tolerance and, as a result, favor asset redeployability, which is less risky due to flexibility of use. Further analyses, such as propensity score matching, an instrumental‐variable analysis, and Oster's approach for assessing coefficient stability, validate the results. Our results suggest that female directors foster sustainability by enhancing asset redeployability.
Purpose
This study aims to examine the impact of board gender diversity on company greenhouse gas (GHG) performance, the influence of a critical mass of women on boards on carbon performance (CP) score and its three components separately (Scope 1, Scope 2 and Scope 3). This study examines the presence of institutional investors as a contingent factor that intensifies the effectiveness of the critical mass of female directors on CP.
Design/methodology/approach
Using a sample of the US companies listed on Securities and Exchange Commission for the period 2011–2018 and making a total of 2416 observations. This study shows that reaching a critical mass of female board members enhances the level of CP. In addition, this study finds that the presence of institutional investors positively moderates this relationship.
Findings
The main results suggest that there is a nonlinear relationship between a critical mass of women directors and CP, and that institutional investors play a strategic role in shaping this relationship. The effect of institutional investors on the three components of CP is also analyzed.
Research limitations/implications
This research is characterized by the methodology adopted for a quantitative variable for measuring CP. Indeed, other research the proxies related to carbon measurements are often used as a simple binary variable. This study verifies the harmony of the theory of critical mass measuring diversity within the board of directors, the presence of institutional investors on GHG emissions (Scope 1, Scope 2 and Scope 3), unlike previous studies (Tingbani et al. , 2020; Nuber and Velte, 2021) which only focus on the two measures of carbon emissions (Scope 1 and Scope 2).
Originality/value
This study shows identically that gender diversity on the board must reach a critical mass of three women directors to motivate and influence CP. We fill the gap in previous research regarding the role played by the institutional environment of the firm in improving CP. Third, this study highlights the relevance of having a critical mass of pressure-resistant female directors on boards due to their engagement in climate change issues and CP.
Bu çalışmanın amacı, firma yönetim kurulundaki cinsiyet çeşitliliğinin ve kadın üye dağılımının temsil maliyetleri üzerindeki etkisini incelemektir. Bu amaç doğrultusunda çalışmada, Borsa İstanbul’a kayıtlı 202 finansal olmayan firmanın 2012-2020 dönemine ait verileri panel veri analiz yöntemiyle analize tabi tutularak, firmaların yönetim kurulunda kadın üye bulunması ile temsil maliyetleri arasındaki ilişki belirlenmeye çalışılmıştır. Analiz sonuçları, yönetim kurulunda kadın üyelerin varlığının temsil maliyetlerini anlamlı düzeyde azaltarak asil-vekil çatışmasını hafiflettiğini göstermiştir. Ayrıca, kritik kitle teorisi ile tutarlı biçimde, üç veya daha fazla kadın üyeye sahip yönetim kurullarının daha az sayıda kadın üyeye sahip yönetim kurullarına kıyasla temsil maliyetlerinin azaltılmasında daha güçlü bir etkiye sahip oldukları görülmüştür. Çalışmanın sonuçları, kadın yöneticilerin firmada kurumsal yönetişimin yerleşmesinde, temsil sorununun çözümünde, temsil maliyetlerinin azaltılmasında ve hissedarlar ile diğer paydaşların çıkarlarının korunmasında daha etkili olduklarına işaret etmektedir. Dolayısıyla, firmaların yönetim kurullarında kadın üyelerin varlığını artırmaya yönelik düzenlemeler ve çalışmalar yapılması önerilmektedir.
Building a sustainable organization is one of the most important goals in business. To build sustainability, firms need to have strong social commitment to establish value‐creating stakeholder relationships. As boards of directors play a critical role in setting strategy, providing management oversight and monitoring, it is also their responsibility to ensure the firm's commitment to its social responsibilities. With the right composition, boards can be effective in driving long‐term vision and creating good stakeholder relationships, contributing to firms' social capital. In this paper, we analyze board characteristics of publicly listed US firms and find evidence that support the diversity theory. In particular, that board gender diversity (proportion of female directors) is positively associated with firms' social commitment to human rights, product responsibility, and their community and workforce, evidencing female directors' contribution to firms' sustainability. To ensure the robustness of our analysis, we conduct additional analyses including propensity score matching, entropy balancing, and instrumental‐variable analysis.
This study investigates whether board gender diversity matters in banks' initial responses to the COVID-19 pandemic in supporting their customers, communities and governments. We construct a unique and comprehensive COVID-19 Bank Response Measure (C19BRM) by compiling a novel hand-collected dataset on supportive measures announced by US and European banks during the first wave of the pandemic. We find that banks with higher board representation of women directors supported their customers and communities more. Our findings also reveal that more women on the boards increased their charity and donations. Our results are robust to the potential self-selection bias of women choosing to join boards of more responsible banks, the omitted variables bias, and alternative measures of gender diversity.
The recent climate emergency declaration by many nations around the world signifies the severity of the impact of climate change. As an entity which consumes a large quantity of resources ranging from material to human, corporations have a responsibility to seriously tackle climate change. As a company's board of directors is typically responsible for developing business strategies, including environmental strategies, this paper explores whether gender diversity on corporate boards affect firms' emission performance. Consistent with diversity theory, we find that board gender diversity is positively associated with firms' emission reduction performance. The likelihood that a firm with a gender diverse board reduces environmental emission is 9% higher than its industry peers. To ensure that our results are robust to endogeneity, we conduct additional analyses including propensity score matching (PSM), entropy balancing, and instrumental‐variable analysis.
Purpose: Enhancing diversity on boards has been linked to greater profitability and innovation. Unfortunately, there remains an underrepresentation of women in executive management and leadership positions in the ophthalmic corporate world. The purpose of these analyses was to examine the gender composition of directors for boards associated with the discipline of ophthalmology.
Design:Cross sectional research design
Methods: Using contemporary data, we examined a specific cohort, the American Academy of Ophthalmology (AAO) Foundation Ophthalmic Business Council corporate members as reported in the annual 2019 meeting program (n=23). The board composition was analyzed using an online search of publicly-available information in January and February 2020. The specific outcome measures included the number and percentage of women board members and their roles.
Results: There were a total of 23 Ophthalmic Business Council members with publicly-available data; 37 of 195 total directorship seats (19%) were held by women and nine of 23 companies (39%) listed women as previous or current chairs of committees or outside corporations. Four of the 23 (17%) members of the Ophthalmic Business Council corporations had no women directors.
Conclusions: The boards of directors of the AAO Foundation Ophthalmic Business Council corporate members remain predominately male. Despite the increasing number of women entering the specialty, they remain underrepresented in the corporate world of ophthalmology. Gender parity on boards is essential for the economic well-being of ophthalmic corporations as well as the relationship of the Ophthalmic Business Council with AAO members, health care systems, insurance carriers, government officials and the public.
Nghiên cứu này tập trung vào 357 doanh nghiệp đang niêm yết trên Sở giao dịch chứng khoán Hà Nội (HNX), nhằm tìm ra mối quan hệ giữa đa dạng giới tính, cơ cấu ban lãnh đạo doanh nghiệp và hiệu quả hoạt động của các doanh nghiệp này. Kết quả nghiên cứu cho thấy, số lượng ban lãnh đạo trong doanh nghiệp có tác động ngược chiều đến ROA, trong khi lãnh đạo là nữ, chủ tịch hội đồng quản trị (HĐQT) là người nước ngoài không có tác động đến hiệu quả tài chính tại các doanh nghiệp này.
The present study investigates the effects of women on companies' boards on the quality of non-financial information, and the influence that a mandatory ap-proach has on this relationship. Previous studies have dealt with analysing the ef-fects of female presence on CSR or ESG information, but few pieces of research have taken into account other strands of non-financial information and have re-sorted to an index to measure its quality. Therefore, this study aims to contribute by extending the analysis to any type of non-financial information communicated by a company. Moreover, the present research contributes to the strand of litera-ture investigating the role of women on companies' boards. In fact, the results of the OLS regression analysis demonstrated that the presence of women with an ex-ecutive role positively influences the quality of disclosure in Italy, and this rela-tionship is not influenced by the advanced stage of application of the regulation on gender quotas. Moreover, disclosure quality is significantly higher for firms that disclose a non-financial statement. Nevertheless, the study suffers from some limi-tations with respect to the sample size and the analysis of the trend in reporting af-ter the introduction of Directive 2014/95/EU.
This study examines the effects of executive gender diversity (EGD) and board gender diversity (BGD) on hotel financial performance in China based on the framework of the gender role, agency, and resource dependence theories. This research documents a negative effect of EGD and no significant effect of BGD on hotel financial performance. Moreover, the effect of EGD on hotel financial performance captured by return on equity (ROE) exhibits a U-shaped curve, with the profitability measure bottoming out at 21%. Our analysis also shows that a critical mass of 40% of EGD serves as a positive moderator for the EGD-ROE relationship. Beyond this point, gender-balanced executive groups evade negatives rooted in the gender role theory, enjoy positives drawn in the agency and resource dependence theories, and generate superior financial performance compared to all-male executive groups. This research offers important implications for human resource management and policy and regulation formulation.
This paper investigates (a) the relationship between board gender diversity and the assurance of Corporate Social Responsibility (CSR) reports, (b) and examines the effect of ownership concentration on that relationship. Logistic regression analysis is used to estimate the coefficients of the variables. The results show a positive relationship between board gender diversity and the assurance of CSR reports, and that, consistent with critical mass theory, the relationship is greater for firms with two or more women on boards. Further analysis, however, shows that ownership concentration has an adverse effect on the board gender diversity and CSR assurance nexus. Practically, the study provides stakeholders the impetus to pursue reforms that advance board gender diversity among firms to promote corporate governance and accountability. Theoretically, it contributes to the literature on board gender diversity. It has also advanced the relevance of critical mass theory in the context of female in the boardroom.
This paper investigates whether gender-diverse bank boards can play a role in preventing costly misconduct episodes. We exploit the fines received by European banks from US regulators to reduce endogeneity issues related to supervisory and governance mechanisms. We show that greater female representation significantly reduces the frequency of misconduct fines, equivalent to savings of $7.48 million per year. Female directors are more influential when they reach a critical mass and are supported by women in leadership roles. The mechanism through which gender diversity affects board effectiveness in preventing misconduct stems from the ethicality and risk aversion of the female directors, rather than their contribution to diversity. The findings are robust to alternative model specifications, proxies for gender diversity, reverse causality, country and bank controls, and sub-sample analyses.
Unlike large businesses, small and medium-sized enterprises (SMEs), being a key growth driver in accomplishing immeasurable socio-economic objectives, possess different governance structures and face unique governance issues. Through the agency perspective, this research endeavours to pore over how the quality of their board affects the performance of SMEs in India. A regression model was run applying heteroscedasticity robust standard errors (RSE) on a sample of 68 BSE-listed SMEs for the period from 2013–2014 to 2017–2018. The results of the regression of the performance of the SMEs against their board attributes showed the prominent contribution of high promoters’ shareholding, signifying that SMEs with a highly concentrated ownership structure demonstrate better performance. Firm leverage and firm performance were shown to have a positive and significant relationship with each other, suggesting that levered firms display substantially better performance. On the other hand, it was found that increasing the number of independent directors and female directors does not necessarily result in improved firm performance. This finding suggests that tokenism, that is, appointing independent directors and female directors merely to comply with norms but not in true spirit, can reduce a firm’s performance. This research effort contributes to the literature constructively through explaining the linkage between board quality and the performance of SMEs, particularly in the Indian context, and has implications for the escalation of governance standards through bringing more clarity to and streamline policy and disclosure.
In the last decade, there has been increasing awareness of the slow pace of advancement of women onto corporate boards, despite over thirty years of equal opportunities policies. The lack of female representation in corporate decision-making is now an important issue for policy-makers, particularly in Scandinavia where political intervention is underway. Gender diversity on corporate boards is an emergent issue for developing economies such as India and China, and some countries in the Middle East (Tunisia, Jordan, Egypt and Morocco) are also starting to recognise the importance of developing their female talent up to board level. Indeed, until recently, the lack of women on top corporate boards appeared to be a global phenomenon, with women constituting less than 15 per cent of members of top company boards in the USA, the UK, Canada, Australia, New Zealand and many European countries. However by 2005, Norway, Sweden, Slovenia, Estonia, Bulgaria, Romania and Finland had at least 15 per cent female representation on their top 50 corporate boards (European Commission, 2005).
In this chapter, we consider theoretical perspectives that shed light upon the persistence of this phenomenon and how positive change can be achieved. We examine the international statistics on women directors, including those from Scandinavia where quota systems have recently been introduced. We then consider the characteristics of companies that have appointed women directors. This is followed by an examination of the characteristics of women directors on large corporate boards, including their human capital. We then consider the links between women on boards and corporate performance, reviewing extant research on the business case, the relationship between gender diversity on corporate boards and firm financial performance, as well as the link with good corporate governance.
Highlighting the approaches selected by the USA, UK and Scandinavia, we consider next how different countries have addressed the issue of lack of female representation on corporate boards. We report a new mentoring scheme in the UK involving top chairmen and senior women managers in non-competing companies. We conclude with suggestions for further research.
Before we begin, we should clarify the terms for the different types of directors and boards. In the US, the term for a corporate board director with executive responsibility and an employment contract with the firm is 'inside director.' In the UK, such directors are 'executive directors' (ED), but do not include the company secretary, the legal officer who is generally considered an inside director in the USA. Similarly, the American term 'outside director' is equivalent to 'non-executive director' (NED) in the UK, and 'supervisory board director' in other parts of Europe. In the US and UK, single tier boards comprise both inside and outside directors, including both chairman and chief executive, all with legal status as directors. In most European governance systems, there is a two-tier board, with the chief executive running the executive board (whose members do not have legal status) and the chairman running the supervisory board of directors.
Using evidence from a survey of women directors in FTSE 100 companies, this paper considers possible explanations for the persistent homogeneity of top UK boards. Only 61 per cent of the top 100 companies had female directors in 2002, down from 64 per cent in 1999. Women held only 3 per cent of executive (= US inside) directorships, and there were only 15 women executive directors in total. Explanations usually include women's lack of ambition, lack of experience and lack of commitment. These have been disproved by research, but underlying theories of social exclusion may provide insight into this persistent phenomenon. Copyright Blackwell Publishing Ltd. 2004.
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This study examines the proposition that the presence of women on a company's board of directors is positively associated with gender diversity in its top management team. Regression analyses indicate that after controlling for firm size and profits, industry type and profits, number of officers, and number of board members, the number of women corporate directors on a Fortune 500 board is positively associated with the number of women officers at the company, the number of women officers holding line jobs, the presence of a critical mass of women officers, the number of women officers with high-ranking or "clout" titles, and the presence of women among the company's top earners. These results indicate the importance of women board members for top management team diversity, and suggest that companies striving for increased gender diversity in their senior officer ranks and more facilitative environments for their top women employees should pay attention to their board-level representation of women.
Purpose
Describes how actionable knowledge is created to successfully initiate consulting relationships designed to promote changes in the composition of corporate boards and, ultimately, social change to eliminate exclusionary practices that are keeping women from consideration for board seats.
Design/methodology/approach
Examines the work of The Boston Club in promoting women on corporate boards to build needed theory to guide change efforts.
Findings
Concludes that no one theoretical perspective supplies the necessary guidance. Presents a model that combines psychodynamic, organizational learning, open systems, and critical management studies views.
Originality/value
Presents the push/pull approach taken by The Boston Club that addresses perceived social constraints and psychological needs involved in changing behavior to create commitment to adding women to boards. Suggests that the sequencing of push and pull techniques may be an important consideration in designing change efforts.
Appointment as a director of a company board often represents the pinnacle of a management career. Worldwide, it has been noted that very few women are appointed to the boards of directors of companies. Blame for the low numbers of women of company boards can be partly attributed to the widely publicized "glass ceiling". However, the very low representation of women on company boards requires further examination. This article reviews the current state of women's representation on boards of directors and summarizes the reasons as to why women are needed on company boards. Given that more women on boards are desirable, the article then describes how more women could be appointed to boards, and the actions that organizations and women could take to help increase the representation of women. Finally, the characteristics of those women that have succeeded in becoming members of company boards are described from an international perspective. Unfortunately, answers to the vexing question of whether these women have gained board directorships in their own right as extremely competent managers, or whether they are mere token female appointments in a traditional male dominated culture, remains elusive.
The Ultimate Glass Ceiling Revisited: Women on Corporate Boards
- Marilyn M Bellar
- Helms
Bellar, and Marilyn M. Helms, ''The Ultimate
Glass Ceiling Revisited: Women on Corporate
Boards,'' Journal of Business Ethics, 2004, 50,
177-186;
For selected works on tokenism and critical mass, see Rosabeth Moss Kanter, Men and Women of the Corporation
- Deborah Dahlen Zelechowski
- Diana Bilimoria
Deborah Dahlen Zelechowski
and Diana Bilimoria, ''Characteristics of
Women and Men Corporate Inside Directors,'' Corporate Governance, 2004, 12, 337-342.
For selected works on tokenism and critical mass, see Rosabeth Moss Kanter, Men and
Women of the Corporation (Basic Books, 1977);
For selected works on the influence of minorities and majorities in decision-making groups, see Rod Bond
- Andrews
Andrews, ''Group Gender Composition and
Work Group Relations: Theories, Evidence,
and Issues,'' in Gary N. Powell (Ed.), Handbook
of Gender and Work (Sage, 1999, 179-202).
For selected works on the influence of
minorities and majorities in decision-making
groups, see Rod Bond, ''Group Size and
Conformity,'' Group Processes & Intergroup
Relations, 2005, 8, 331-354;
joined the Richard Ivey School of Business
- Alison M Konrad
Alison M. Konrad, Ph.D., joined the Richard Ivey School of Business,
University of Western Ontario in 2003 as a professor of organizational