The board gender diversity imitation game: Uncovering the resistant boards that refuse to play

• Published date: 01 September 2024
• Author: Ruth Mateos de Cabo,Ricardo Gimeno,Patricia Gabaldón,Pilar Grau
• Date: 01 September 2024
• DOI: http://doi.org/10.1111/corg.12568

ORIGINAL ARTICLE

The board gender diversity imitation game: Uncovering the

resistant boards that refuse to play

Ruth Mateos de Cabo

1

| Ricardo Gimeno

2

| Patricia Gabald

on

3

| Pilar Grau

4

1

Universidad San Pablo CEU, Madrid, Spain

2

Banco de España, Madrid, Spain

3

IE Business School, IE University, Madrid,

Spain

4

Universidad Complutense, Pozuelo de

Alarcon, Spain

Correspondence

Ruth Mateos de Cabo, Universidad San Pablo

CEU, Julian Romea 23, Madrid 28003, Spain.

Email: matcab@ceu.es

Funding information

MCIN/AEI/10.13039/501100011033,

Grant/Award Number: PID2020-114183RB-

I00; Catedra Universidad CEU San Pablo and

Mutua Madrileña, Grant/Award Number:

060516-USPMM-03/18; Karmo Spirit SL

Abstract

Research question/issue: This study examines the influence of group behavior on

board gender diversity and identifies obstacles to its diffusion. It investigates

whether boards are influenced by group behavior in determining their gender compo-

sition and explores barriers that impede the diffusion process.

Research findings/insights: Analyzing a network of over 18,000 US-listed boards

observed over 20 years, we find a pattern of mimetic behavior, whereby boards imi-

tate the proportion of women on boards (WoB) among their directly tied boards. We

also identify resistant firms with low representation of women on their boards. Our

findings suggest that, among those boards, there are heavily male-dominated boards

resisting the appointment of women, even when surrounded by women directors

among their tied boards. The diffusion of board gender diversity is slowed down by

these resistant boards, hindering the overall progress in increasing gender diversity

within the board network.

Theoretical/academic implications: This research contributes insights into group

behavior and resistance in board gender diversity. Adopting a network theory lens,

our study sheds light on interactions between firms and their connected companies

in terms of imitation practices. Drawing on social identity theory, we highlight the

significance of the resistance to increasing women's representation exhibited by

some boards.

Practitioner/policy implications: Resistant boards, despite group pressure, slow

down the diffusion of board gender diversity within the network, leading to overall

stagnation. Understanding the sources of resistance allows an exploration of alterna-

tive measures to promote diversity without rigid mandates.

KEYWORDS

board networks, corporate governance, diffusion, group behavior, interlocking directorates,

women on boards

Received: 26 January 2023 Revised: 20 November 2023 Accepted: 1 December 2023

DOI: 10.1111/corg.12568

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any

medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.

© 2024 The Authors. Corporate Governance: An International Review published by John Wiley & Sons Ltd.

814 Corp Govern Int Rev. 2024;32:814–832.

wileyonlinelibrary.com/journal/corg

1|INTRODUCTION

Nobody is an island, and neither are boards of directors. However,

most of the research on women on boards (WoB), when analyzing the

factors influencing the proportion of WoB within companies

(Gabaldon et al., 2016; Terjesen et al., 2009), has treated research

units—be they individuals (e.g., Nekhili & Gatfaoui, 2013; Singh

et al., 2008), firms (e.g., Hillman et al., 2007; Mateos de Cabo

et al., 2011), or countries (e.g., Carrasco et al., 2015; Clark et al., 2021;

Terjesen et al., 2009)—as independent entities, neglecting the inter-

connectedness among them and the way in which these relationships

may influence board composition dynamics. Addressing this critical

gap in the WoB literature, the present study aims to examine the

potential influence of companies connected by interlocked director-

ships on the gender composition of boards. Specifically, our focus is

on shedding light on the underlying group behavior that perpetuates

gender disparities within boardrooms. In the context of this study,

“group behavior”is defined as the collective actions or aggregated

practices of interlocked boards of directors. By extending this defini-

tion beyond the scope of individual actions, we aim to capture the

influence of interconnected boards, particularly in their adoption of

diversity practices, and the subsequent impact on the gender compo-

sition of a specific board. We build on the framework provided by

social network theory and social identity theory to guide our study.

The existing body of research on WoB has largely neglected the

potential influence of group behavior on individual firms, particularly

in relation to board networks. While some studies have studied WoB

within the context of board networks, they have focused on the micro

level, analyzing the perspectives of individual directors rather than the

board level (i.e., the mezzo level). For example, Seierstad and Opsahl

(2011) explored the effects of the Norwegian gender quota on

women directors' social capital; Hawarden and Marsland (2011) stud-

ied the locations of WoB in the New Zealand network; Hodigere and

Bilimoria (2015) investigated how professional networks of non-

executive directors contribute to new appointments; Strøm (2019)

concluded that the Norwegian quota law has driven women to more

central positions, replacing many of the traditional male profiles in

these networks; Burzynska and Contreras (2020) addressed the

increase in the network benefits that women directors experience

after the passage of quotas; Grau et al. (2020) found women to have

fewer connections than men; Sarabi and Smith (2021) examined busy

directors' degree of gender differences in the UK and Norway; and

Mateos de Cabo et al. (2022) studied the impact of political and regu-

latory pressure to increase the influence of women within the

European boards of directors' networks. However, these studies have

only examined individual directors' centrality measures within the net-

works and have largely neglected the mezzo level (i.e., the board/firm).

Only a few exceptions, such as the works of Gimeno et al. (2022) and

Hillman et al. (2007), which will be discussed further in the following

section, have suggested that boards may emulate their connected

boards regarding their degree of gender diversity. In this paper, we

develop a theoretical framework, building on social identity theory

and social network theory, to explore the mechanism behind this

imitation of board gender diversity and employ an empirical strategy

to test the validity of our theory.

Like individuals, firms belong to social networks connected by

directors who hold positions on multiple boards, creating a network

built on interlocks or network ties (Carpenter & Westphal, 2001;

Mizruchi, 1996). Indeed, the prior literature has suggested that ideas,

practices, and strategies spread through the individuals who bridge

organizations via their networks (Aldrich & Zimmer, 1986). Extensive

research has provided evidence supporting the notion that corporate

ideas can be diffused through the replication of decision-making pro-

cesses, specific practices (Westphal et al., 2001), new strategies

(e.g., Geletkanycz & Hambrick, 1997; Mizruchi, 1996), and network

clusters that facilitate imitation (Greve, 2009,2011). Accordingly, a

substantial and growing body of literature has established that compa-

nies are more likely to make strategic decisions if they have directors

who are interlocked with other firms that have already implemented

such decisions (e.g., Cai & Sevilir, 2012; Diestre et al., 2015; Gulati &

Westphal, 1999). Some examples of diffusion among companies

include backdating of stock options (Bizjak et al., 2009), tax reduction

practices (Brown, 2011), disclosure policies (Cai et al., 2014), and

accounting methods (Han et al., 2017). The underlying rationale for

this network effect lies in the idea that, through direct contact with

companies that have already implemented these policies, the value of

these strategies becomes clearer and their adoption is facilitated in

the linked firm (Davis, 1991).

Given the substantial evidence on company imitation via inter-

locks, our study aims to investigate whether the process by which

firms decide on the gender composition of their boards of directors

(i.e., the degree of board gender diversity) is replicated from their

immediate social network (i.e., the companies connected to the firm in

the network). Our theoretical framework draws on social network the-

ory and social identity theory for two main reasons. Firstly, social net-

work theory postulates that practices, in our case concerning the

degree of gender diversity on boards (i.e., the proportion of WoB), dis-

seminates through social networks and interpersonal communication.

Secondly, social identity theory highlights that incumbent individuals

in dominant positions within high-status groups, such as men in our

context, may not only show preference toward those within their own

group but may also actively work to resist the advancement of out-

group members, in this case women directors, to maintain their

unique position and status. This tendency of men belonging to the

business elite to resist women's advancement to the boards allows us

to give sense to different influences and pressures of the agents'

social networks (Liu et al., 2017).

Therefore, the primary objective of this study is to analyze the

potential influence of group behavior in determining the degree of

board gender diversity (i.e., the proportion of WoB) of US companies

from 1999 to 2019. Our specification strategy facilitates the explora-

tion of both collective behavior and the conflicting and opposing influ-

ences exerted by other firms to increase the proportion of WoB. This

study contributes to the existing literature in several ways. Firstly, in

the theoretical field, we build on social network theory to argue that

the characteristics of a group, specifically the boards that are directly

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