National Institutional Systems as Antecedents of Female Board Representation: An Empirical Study

• Author: Stephen Brammer,Johanne Grosvold
• DOI: http://doi.org/10.1111/j.1467-8683.2010.00830.x
• Date: 01 March 2011
• Published date: 01 March 2011

National Institutional Systems as

Antecedents of Female Board Representation:

An Empirical Studycorg_830116..135

Johanne Grosvold* and Stephen Brammer

ABSTRACT

Manuscript Type: Empirical

Research Question/Issue: How are national institutional systems related to the proportion of women found on corporate

boards of directors of companies listed in particular countries? Which particular types of national institutions play the most

important role? We explore cross-country variation in the pattern of female representation on corporate boards and evaluate

the extent to which it is associated with the nature of national institutional systems as captured in f‌ive frameworks each of

which emphasizes the importance of a distinct type of national institutions. Our analysis includes 38 countries and covers

the years 2001–07.

Research Findings/Insights: Our f‌indings show that as much as half of the variation in the presence of women on corporate

boards across countries is attributable to national institutional systems and that culturally and legally-oriented institutional

systems appear to play the most signif‌icant role in shaping board diversity.

Theoretical/Academic Implications: Our study suggests that country-level institutions, previously neglected in studies of

board diversity, play an important role in shaping the prevalence of women on corporate boards and that these need to be

more fully incorporated in future research on board diversity.

Practitioner/Policy Implications: The importance of national institutional systems for board diversity suggests that policy

levers of a regulatory nature and national cultural characteristics are important elements in driving corporate board

diversity and offer distinct opportunities for tailoring a mix of corporate governance interventions that suit the particular

institutional nature of a given country.

Keywords: Corporate Governance, Corporate Board Diversity, Board Demography, Institutional Theory

INTRODUCTION

The role played by national business environments

for a range of corporate bahaviors has long been of

interest to Corporate Governance scholarship (Jackson &

Deeg, 2008; Parboteeah, Hoegl, & Cullen, 2008). National

institutional factors have been identif‌ied as shaping a wide

variety of business bahaviors including entry strategies

(Brouthers, 2002), diversif‌ication (Lee, Peng, & Lee, 2008),

innovation (Lundvall, Johnson, Anderson, & Dalum, 2002),

and corporate governance practices (Denis & McConnell,

2003). Although comparative, cross-national, research has

addressed a wide range of phenomena, it has not, with some

notable exceptions (e.g. Leksell & Lindgren, 1982; Terjesen &

Singh, 2008), contributed signif‌icantly to research on corpo-

rate boards of directors. While a substantial and growing

body of research has focused on corporate governance

systems and their development internationally (Aguilera,

2005; Denis & McConnell, 2003; Khanna, Kogan, & Palepu,

2006), such research has tended to focus on systemic issues

such as evaluating the extent of convergence/divergence in

practice internationally, rather than on questions concerned

with boards of directors or their composition (Aguilera,

2005; Denis & McConnell, 2003; Fligstein & Freeland, 1995).

In recognition of their strategic importance, research con-

cerned with boards of directors has proliferated in recent

years. Within this, a considerable stream of research con-

cerning the demographic aspects of boards of directors has

emerged with a particular emphasis on the gender balance

of boards of directors (Hillman, Cannella, & Harris, 2002;

*Address for correspondence: Johanne Grosvold, Centre for Business Organizations

and Society, School of Management, University of Bath, Claverton Down, Bath BA2

7AY, UK. Tel: +44-1225-384130; E-mail: j.grosvold@bath.ac.uk

116

Corporate Governance: An International Review, 2011, 19(2): 116–135

© 2010 Blackwell Publishing Ltd

doi:10.1111/j.1467-8683.2010.00830.x

Hillman, Shropshire, & Cannella, 2007; Singh, 2007; Terje-

sen, Sealy, & Singh, 2009). In this article, we explore cross-

country variation in the pattern of female representation on

corporate boards and examine the potential for it to be asso-

ciated with national institutional systems as captured in f‌ive

distinct frameworks. Research on the institutional features

of countries has shown that particular institutional charac-

teristics, such as the nature of welfare, education, and f‌inan-

cial systems, and legal, regulatory, and political processes,

tend to exhibit complementarities such that countries

typically exhibit a set, or “bundle,” of mutually reinforcing

institutional characteristics (Jackson & Deeg, 2008). More-

over, research has suggested that groups of countries exist

that each share a distinctive bundle of institutional features

(Aguilera & Jackson, 2003). Together, these distinctive

bundles of institutional features and those countries that

are associated with them constitute “institutional systems”

and prior research has identif‌ied a variety of these systems

that stem from the particular disciplinary orientation of the

institutional analysis. For example, economically-oriented

institutional analysis has identif‌ied distinct varieties of

capitalism (Hall & Soskice, 2001) and national business

systems (Whitley, 1992, 1999), while political/legal institu-

tional research has identif‌ied distinct legal systems (La

Porta, Lopez-de-Silanes, Shleifer, & Vishny, 1998) and

systems of corporate governance (Weimer & Pape, 1999),

and sociological research has identif‌ied systems of national

culture (Gupta, Hanges, & Dorfman, 2002). Our analysis

examines both the overall predictive power of particular

institutional systems in respect of the variation across coun-

tries in the prevalence of women on corporate boards, and

whether support is provided for hypothesized differences

between the clusters of countries within each national insti-

tutional system and the proportion of women on corporate

boards.

Through this analysis, we make two signif‌icant contribu-

tions. First, we extend and complement earlier analyses of

the factors associated with greater prevalence of women

on corporate boards of directors to encompass macro-level

inf‌luences and processes. Given the presence of a signif‌i-

cant debate concerning the mix of policies and practices

necessary to promote women’s participation on corporate

boards, our analysis is able to shed light on the relevance

of national institutional systems to this debate. Second, we

apply the analysis of the inf‌luences of national institutional

systems to encompass the domain of board demography.

In so doing, we contribute to the development of the

emerging literature that addresses a comparative analysis of

country institutions for business bahaviors and outcomes

and contribute to the project of “gendering” comparative

institutional analysis (Estevez-Abe, 2005, 2006; Mandel &

Shalev, 2009).

The next section reviews existing literature relating to

women on corporate boards (WOCBs). We then outline

alternative conceptions of national institutional systems

and develop hypotheses regarding how these inf‌luence

the prevalence of WOCBs. We then discuss our empirical

methods and report our f‌indings. Subsequently, we discuss

the importance of these, for both the literatures on board

demography and comparative institutional analysis. A f‌inal

section concludes.

PRIOR RESEARCH ON WOCBs

A large body of research has focused on WOCBs. In the most

recent comprehensive review of this research, Terjesen

et al. (2009) identify over 400 published references on the

topic, including 180 articles in academic journals and books.

Terjesen et al. (2009) classify extant research according to its

level of analysis: micro (relating to individual directors);

meso (relating to boards or f‌irms/organizations); and macro

(relating to the industry/wider environment within which

boards and organizations are situated). Within this, the vast

majority of existing scholarship focuses on analysis at

the micro or meso levels, with relatively little research

addressing macro-level issues.

At the micro level, a large amount of research has ana-

lyzed the characteristics of WOCBs and has attempted to

explore their experiences of involvement in boards of direc-

tors (Talmud & Izraeli, 1999; Terjesen et al., 2009). Much of

this research has identif‌ied the formal educational attain-

ment and experiential characteristics that women need to

obtain board positions. Burke (1997), Sheridan (2002) and

Singh and Vinnicombe (2004) surveyed female board direc-

tors in Canada, Australia, and the UK, respectively, and

higher education attainment in the form of university

degrees were prevalent among the female directors in all

three countries as well as extensive business experience. In a

similar vein, Bilimoria and Piderit (1994) conclude that even

though women possess suff‌icient educational qualif‌ications

and relevant professional experience “. . . they continue to

be blocked in their rise to the top” (Bilimoria & Piderit,

1994:1471) suggesting that even if women attain the formal

and professional prerequisites for board directorships,

they face a number of organizational barriers en route to

board directorships, including opaque recruitment pro-

cesses, insuff‌icient career development opportunities, and

lower remuneration (Singh & Vinnicombe, 2004). Sheridan

(2002) in her research on Australian female board directors’

experiences concluded that as well as relevant and profes-

sional experience, the women’s contact network was crucial

in securing their board positions.

At the meso level, a considerable amount of research has

described the prevalence of WOCBs, often by undertaking

a “census” of the boards of companies listed on local stock

exchanges, and sought to understand these by reference to

organizational characteristics (Terjesen et al., 2009). Many

studies have examined the prevalence of WOCBs within

particular country settings including the UK (Conyon &

Mallin, 1997; Sealy, Singh, & Vinnicombe, 2007; Singh &

Vinnicombe, 2004, 2006; Singh, Vinnicombe, & Johnson,

2001), the US (Adams & Flynn,2005; Arfken, Bellar, & Helms,

2004; Farrell& Hersch, 2005; Peterson & Philpot, 2007; Soares,

Carter, & Combopiano, 2009), Canada (Burke, 1997, 1999),

Switzerland (Ruigrok, Peck, & Tacheva, 2007), Australia

(Kang, Cheng, & Gray, 2007; Ross-Smith & Bridge, 2008;

Sheridan, 2002), New Zealand (McGregor, 2003), Denmark

(Rose, 2007), Israel (Talmud & Izraeli, 1999), and Spain

(Campbell & Mínguez-Vera, 2008; De Anca, 2008). Looking

across the available evidence suggests that there is a striking

degree of variation in the proportion of board directors who

are women in a given country, ranging from less than one

percent in Switzerland (Ruigrok et al., 2007) to just over 15

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