Women on Corporate Boards of Directors: Theories, Facts and Analysis

In recent years, gender diversity in the boardroom and more generally within organizations, has gained considerable interest in public debate, academic research, government agenda, and corporate strategy. Previously considered as a social issue, gender diversity on boards of directors is increasingly perceived as a value-driver in organizational strategy and corporate governance for several reasons (Terjesen, Sealy and Singh, 2009). Firstly, as institutional investors begin to take into account board diversity, this matter progressively becomes part of their investment practices (Carter, Simkins and Simpson, 2003). Fair employment practices for women are now part of the criteria of many social investment indices (e.g. FTSE4Good or Domini 400 Social Index). Secondly, board diversity is required by important stakeholders, such as customers or employees. The consideration of stakeholders’ preferences, aspirations, and concerns might be beneficial for firms through improved customer loyalty, and employee motivation (e.g. Powell, 1999). Thirdly, recent legislation and diversity initiatives worldwide have pointed out the importance of female representation on boards of directors. For example, the Norwegian government requires companies to appoint at least 40% of women. Spain and France have implemented the same affirmative actions by 2015 and 2017 respectively (Terjesen et al, 2009). Fourthly, board diversity issues have also been discussed by best practices in corporate governance. For example, the Sarbanes-Oxley Act of 2002 (in the United States) or the Higgs Review (in the United Kingdom) encourages more diversity on corporate boards (Adams and Ferreira, 2009; Dalton and Dalton, 2008). Finally, gender diversity is on companies’ agenda, since more women are in top management positions today. Therefore, the pipeline of female directors and women CEOs is expected to increase in the coming years (Helfat, Harris and Wolfson, 2006).