Our latest pick on interesting articles covering the challenges for balanced company boards.

Resistance to Appointing Female Directors’ onto Nordic Boards
In this empirical study, the authors investigate the variation in firms’ response to institutional pressure for gender-balanced boards, focusing specifically on the preservation of prevailing practices of director selection and its impact on the representation of women on the board of directors.

Using 8 years of data from publicly listed Nordic corporations, the authors show societal pressure to be one of the determinants of female directorship. Moreover, in some corporations, the director selection process may work to maintain “a traditional type of board”. In such boards, demographic diversity among male members appears to be associated with a lower share of female directors, although the authors cannot establish whether this reflects discrimination or a desire to maintain critical competencies.

With this paper, the authors add to the theoretical understanding of the factors underlying female board appointments by adopting an institutional theory lens to study female board representation. Viewing the demands for gender-balanced boards in terms of societal pressure for the de-institutionalization of the prevailing norms and practices, the authors highlight preferences for maintaining established practices as a potentially important barrier to institutional change.

On these grounds, the authors conjecture on the relationship between the gender diversity of boards and other diversity dimensions. The authors suggest that a board room gender quota (if implemented) is supplemented by policies to ensure the transparency of board changes, in order to prevent the crowding out of other diversity dimensions.

Gregorič, A., Oxelheim, L., Randøy, T. et al. 2017. Resistance to Change in the Corporate Elite: Female Directors’ Appointments onto Nordic Boards.  
Journal of Business Ethics, 141(2), 267–287. 


Increasing the Number of Women on Boards 
Understanding the spread of national public policies to increase the percentage of women on boards is often presented using different types of institutional theory logic. However, the importance of the political games influencing these decisions has not received the same attention. In this article, the authors look beyond the institutional setting by focusing on the role of actors.

The authors explore processes that include who the critical actors that drive and determine these policies are, and what motivates them to push for change. The authors employ a processual design approach using a longitudinal country-comparative case study exploring the case of Norway, England, Germany and Italy. The authors map the political games, both inside and outside legislative areas, including the micro-politics among various actors and groups of actors in the selected countries. Data are collected through participation observations, interviews and text analyses.

The study contributes by filling important gaps in the literature by embedding the discussion about women on boards in politicking and national public policies and by introducing dynamic perspectives. Finally, by using a processual design approach, the authors capture the reality of the women on board debates at different points of time and in different actor and motivational contexts. The study has consequences for how policy-makers and businesses may follow up and act, based on the debates.

Seierstad, C., Warner-Søderholm, G., Torchia, M. et al. 2017. Increasing the Number of Women on Boards: The Role of Actors and Processes.  
Journal of Business Ethics, 141(2), 289–315. 


Determinants of Women in Leadership in Australia 
This project reports on the determinants of women in leadership in Australia. Based on longitudinal data from the Australian Census of Women in Leadership (Workplace Gender Equality Agency), the authors developed a multilevel understanding of the factors at firm and industry level that drive the selection of women to top management team and board positions.

The findings suggest that while the number of women on Australian boards has increased over the period 2003-2012, the number of female executives is relatively stable (and low) over the same period. Moreover, the evidence suggests that implementation of formal requirements, such as the ASX Corporate Governance Principles and Recommendations introduced in 2010, has increased the number of women on boards but not on executive teams, calling in question the effectiveness of such measures for increasing female representation among executives.

Among the multiple drivers of women in leadership, the researchers find important differences between boards and executive teams; specifically board female representation appears to be related to industry internationalisation and firm size whereas executive female representation is not. Service industry and firm level intellectual capital, however, are consistently associated with female representation on both boards and executive teams.

Read the full research paper for free.
Nielsen, S. and Nielsen, B. n.d. Determinants of Women in Leadership in Australia: A Multilevel Longitudinal Analysis.
Available at: https://www.wgea.gov.au/completed-australian-research/determinants-women-leadership-australia


Board Gender Diversity Influences Financial Performance 
In recent years, several countries have enacted guidelines and/or mandatory laws to increase the presence of women on the boards of companies. Through these regulatory interventions, the aim is to eradicate the social and labour grievances that women have traditionally experienced and which has relegated them to smaller-scale jobs. Nevertheless, and despite the advances achieved, the female representation in the boardroom remains far from the desired levels. In this context, it is now necessary to enhance the advantages of board gender diversity from both ethical and economic points of view.

This article examines the relation between board gender diversity and economic results in Spain: the second country in the world to legally require gender quotas in boardrooms and historically characterized by a minimal female participation in the workforce. Based on a sample of 125 non-financial firms listed on the Madrid Stock Exchange from 2005 to 2009, the findings show that in the period analysed the increase of the number of women on boards was over 98 %. This suggests that compulsory legislation offers an efficient framework to execute the recommendation of Spanish codes of good governance by means of the increase in the number of women in the boards of firms.

Furthermore, the authors find that the increase in the number of women on the boards is positively related to higher economic results. Therefore, both results suggest that gender diversity in boardrooms should be incremented, mandatory laws being a key factor to do so.

Reguera-Alvarado, N., de Fuentes, P. & Laffarga, J. 2017. Does Board Gender Diversity Influence Financial Performance? Evidence from Spain.
Journal of Business Ethics, 141(2), 337–350. 


Financial Management Effectiveness and Board Gender Diversity 
Although non-profit organisations typically have high representation of females on their boards, relatively little is known about the effects of gender diversity in these organisations particularly in relation to financial management. In this archival study, resource dependency theory and agency analysis are combined to provide theoretical insight and empirical analysis of gender diversity on effective financial management in member-governed, community financial institutions.

The investigation is possible due to the unique characteristics of the organisational form and region being examined—credit unions in Northern Ireland. The sector has not been subject to external regulation on board gender, yet a wide array of gender mix on boards ranging from 100 % male to 100 % female are in existence. In addition, effective financial management is crucial to their survival and their ability to meet member objectives. Boards with higher female representation exhibit superior financial management first, in respect of loan book quality in the period of austerity following the financial crisis and second when measured against return on assets.

Ward, A.M. & Forker, J. 2017. Financial Management Effectiveness and Board Gender Diversity in Member-Governed, Community Financial Institutions.
Journal of Business Ethics, 141(2), 351–366. 


Board Gender Diversity and Corporate Response to Sustainability Initiatives: Evidence from the Carbon Disclosure Project 
This paper investigates the effect of female representation on the board of directors on corporate response to stakeholders’ demands for increased public reporting about climate change-related risks. The authors rely on the Carbon Disclosure Project as a sustainability initiative supported by institutional investors. Greenhouse gas emissions measurement and its disclosure to investors can be thought of as a first step toward addressing climate change issues and reducing the firm’s carbon footprint.

A sample of publicly listed Canadian firms over the period 2008–2014 showed that the likelihood of voluntary climate change disclosure increases with women percentage on boards. The researchers also find evidence that supports critical mass theory with regard to board gender diversity. These findings reinforce initiatives being undertaken around the world to promote gender diversity in corporate governance while demonstrating board effectiveness in stakeholder management.

Ben-Amar, W., Chang, M. & McIlkenny, P. 2017. Board Gender Diversity and Corporate Response to Sustainability Initiatives: Evidence from the Carbon Disclosure Project. 
Journal of Business Ethics, 142(2), 369–383.


Professors on the Board: Do They Contribute to Society Outside the Classroom?
According to the data, 38.5 % of S&P 1500 firms have at least one professor on their boards. Given the lack of research examining the roles and effects of academic faculty as members of boards of directors (professor–directors) on corporate outcomes, this study investigates whether firms with professor–directors are more likely to exhibit higher corporate social responsibility (CSR) performance ratings.

Results indicate that firms with professor–directors do exhibit higher CSR performance ratings than those without. However, the influence of professor–directors on firm CSR performance ratings depends on their academic background—the positive association between the presence of professor–directors and firm CSR performance ratings is significant only when their academic background is specialized (e.g., science, engineering, and medicine). Finally, this positive association weakens when professor–directors hold an administrative position at their universities.

Cho, C.H., Jung, J.H., Kwak, B. et al. 2017. Professors on the Board: Do They Contribute to Society Outside the Classroom? 
Journal of Business Ethics, 141(2), 393–409.