Women Directors on Corporate Boards: A Review and Research Agenda

• Author: Siri Terjesen,Ruth Sealy,Val Singh
• Date: 01 May 2009
• Published date: 01 May 2009
• DOI: http://doi.org/10.1111/j.1467-8683.2009.00742.x

Women Directors on Corporate Boards:

A Review and Research Agenda

Siri Terjesen*, Ruth Sealy and Val Singh

ABSTRACT

Manuscript Type: Review

Research Question/Issue: This review examines how gender diversity on corporateboards inf‌luences corporate governance

outcomes that in turn impact performance. We describe extant research on theoretical perspectives, characteristics, and

impact of women on corporate boards (WOCB) at micro, meso, and macro levels: individual, board, f‌irm, and industry/

environment.

Research Finding/Results: To the best of our knowledge, this is the f‌irst comprehensive review of WOCBs, incorporating

and integrating research from over400 publications in psychology, sociology, leadership, gender, f‌inance, management, law,

corporate governance, and entrepreneurship domains. In addition, we organized our f‌indings to provide a new lens

enabling the f‌ield to be readily examined by level and by theoretical perspective. The review indicates that WOCB research

is about improving corporate governance through better use of the whole talent pool’s capital, as well as about building

more inclusive and fairer business institutions that better ref‌lect their present generation of stakeholders.

Theoretical Implications: With only one in 10 papers addressing theoretical development, the predominant perspectives

are human and social capital theories and gender schema at the individual level; social identity, token, and social networks

theories at board level; resourcedependency, institution, and agency theories at the f‌irm level; and institutional,critical, and

political theories at the environmental level. We provide a short synopsis of f‌indings at each level, and conclude with an

outline of fruitful directions for future research.

Practical Implications: There are increasing pressures for WOCBs from diverse stakeholders, such as the European

Commission, national governments, politicians, employer lobby groups, shareholders, Fortune and FTSE rankings, best

places for women to work lists, as well as expectations from highly qualif‌ied women who are likely to leave if they see no

women board members. Rationales generally draw on the business case; however, the moral justice case is also used by

those who seek a fairer gender balance in all aspects of society. From our review, the “Impact” section charts the effect of

WOCB at all four levels of analysis.

Keywords: Corporate Governance, Corporate Boards, Gender, Theory, Characteristics, Impact, Literature Review

INTRODUCTION

As recent corporate governance scandals and the

Sarbanes-Oxley legislation, Higgs Review, and other

initiatives draw attention to the importance of corporate

governance, scrutiny has turned to the composition of cor-

porate boards of directors. For example, the demise of the

Icelandic bank Kaupthing led to the immediate resignation

of the entire board of directors (The Age, 2008). In the wake

of the failure of other f‌inancial institutions, such as

Lehman Brothers, investors, governments, and concerned

parties around the world are demanding answers to ques-

tions such as that posted in two separate off‌icial blogs of

Wall Street Journal and Business Week, “Where was Leh-

man’s Board?” (Berman, 2008; Thornton, 2008). While the

market plunge has highlighted media coverage on the

directors of the board, practitioners and academics have

long followed board composition, including the slow

advancement of women onto corporate boards, despite

nearly 40 years of equal opportunities policies. A Google

search reveals 340,000 webpages for female or women cor-

porate board directors, including 25,400 webpages in

Google Scholar. Extant research emerges from an interdis-

ciplinary academic community, across psychology, sociol-

ogy, leadership, gender, f‌inance, management, law,

corporate governance, and even entrepreneurship. It is

timely therefore to pull together research on the nature and

impact of gender diversity in board composition as a facet

of corporate governance.

*Address for correspondence: 1309 E. 10th St, Bloomington, IN 47405, USA. E-mail:

siriterjesen@yahoo.com

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Corporate Governance: An International Review, 2009, 17(3): 320–337

© 2009 Blackwell Publishing Ltd

doi:10.1111/j.1467-8683.2009.00742.x

Female representation in corporate decision making

is an important issue for policymakers. For example, the

Norwegian government requires that boards of directors of

publicly held f‌irms be comprised of at least 40 per cent

women (Hoel, 2008) and the Spanish government has com-

mitted to 40 per cent by 2015 (De Anca, 2008). Around the

world, other countries are considering legislation while

developing economies, such as India and China, and Middle

East countries (Tunisia and Jordan) are beginning to recog-

nize the importance of developing female talent up to the

board level (Singh, 2008a).

To the best of our knowledge, this is the f‌irst comprehen-

sive review of extant research on women on corporate

boards (WOCB). We reviewed over 400 published refer-

ences, including articles, book chapters, working papers,

and reports. The literature was identif‌ied through EBSCO,

ProQuest, and Google Scholar searches. In-press and

working papers were solicited by e-mail from 40 scholars of

gender and corporate governancewho recently published in

leading journals or presented papers at conferences.

In the following sections, we review the literature on

women directors in three key areas: theoretical perspectives,

characteristics, and impact. We recognize that there are addi-

tional areas, such as initiatives to promote women to direc-

torships; however we consider these outside the scope of

our study.1A f‌inal section suggests directions for future

studies in existing research streams, as well as major recom-

mendations for new research agendas.

Weexplore each major theme across four micro, meso, and

macro levels – individual, board, f‌irm, and industry/

environment. By individual, we refer to the individual

director, or aspirant director. The board level captures the

processes and interactions thatoccur within the team. We use

the “f‌irm” category to describe experiences in other parts of

the f‌irm, outside the board, and also f‌irm strategy and struc-

ture. Industry/environment captures the local, regional, and

national industrial and external environments. While these

categories are overlapping,given the f‌luid nature of business,

we hope this structure guides our reader and aids future

researchers. Table 1 provides an overview of the review.

THEORETICAL PERSPECTIVES

The vast majority of academic literature on WOCBs

(approximately 160 of 180 published articles, working

papers, and book chapters reviewed) does not explicitly

develop a theoretical framework. Indeed, the majority of

WOCB literature is descriptive.2We identif‌ied 20 theory-

based studies of the phenomenon of women on boards that

employ a variety of frameworks at micro, meso, and macro

levels. The major theoretical perspectives, and, in most cases

TABLE 1

Women on Corporate Boards: Review Structure

Theory Characteristics Impact

Individual Human Capital

Status Characteristics

Gender Self-Schema

Demographics

Social Capital

Human Capital

Tokens and minority members

Role models

Diversity supporters

Board Social Identity

Social Network and

Social Cohesion

Gendered Trust

Ingratiation

Leadership

Structure and Size

Roles

Composition

Governance performance

Decision making

Behaviors and culture

Independence

Skills, knowledge and experience

Firm Resource Dependency

Institutional

Agency

Size

Stakeholder distribution

Performance

Financial performance (announcements,

“glass cliff” effect)

Shareholders and ethical investors

Corporate responsibility and philanthropy

Organizational legitimacy and corporate

reputation

Other women (networks, mentors,

inspirational role models)

Recruitment and retention

Industry and

Environment

Institutional

Critical Management

International differences

Within-country differences

Private vs Public initiatives

Cultural attitudes, infrastructure

and public policy

Economic environment

Citizens

Talent

Symbols in media

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Volume 17 Number 3 May 2009© 2009 Blackwell Publishing Ltd