Resistance to Change in the Corporate Elite: Female Directors’ Appointments onto Nordic Boards

Abstract

In this empirical study, we 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, we 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 we cannot establish wether this reflects discrimination or a desire to maintain critical competencies. With this paper we 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, we highlight preferences for maintaining established practices as a potentially important barrier to institutional change. On these grounds, we conjecture on the relationship between the gender diversity of boards and other diversity dimensions. We 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.

Gender differences in speed of advancement: An empirical examination of top executives in the Fortune 100 firms

“…Going forward, efforts to understand differences in career advancement should examine both speed of advancement and promotion rates (e.g., Gorman & Kmec, ; Jones & Makepeace, ; Smith, Smith, & Verner, ; Yap & Konrad, ; Zeng, ). Our results also contribute to the literature that studied the effectiveness and limits of institutional pressures in reducing gender inequality in the workplace (Dezső et al, ; Dobbin & Kalev, ; Gregorič, Oxelheim, Randøy, & Thomsen, ).…”

“…Organizations that comply with these pressures gain public appreciation and increase their legitimacy and reputation, independent of the immediate efficacy of the practices (Meyer & Rowan, 1977). Employers that do not respond to these pressures may invite public criticism, face a loss of reputation, and suffer reduced access to resources (Gregorič et al, 2017;Meyer & Rowan, 1977).…”

Board of Director’s Gender Diversity and Its Impact on Earnings Management: An Empirical Analysis for Select European Firms

“…The use of voluntary regimes has led to some increases in the proportion of women on corporate boards, but the effects are significantly smaller and slower, as is the case of Spain. For instance, Gregorič, Oxelheim, Randøy, and Thomsen (2017) demonstrate that the degree of legal coercion behind the institutional pressure for female directorship is positively associated with the share of women on the board of directors of firms in Denmark, Finland, Sweden, and Norway. They suggest that before the absence of quota laws, as the organizational adaptation to societal expectations for more female directors, it should be supplemented by additional policies to ensure the transparency of board changes.…”

The Carrot or the Stick: Self-Regulation for Gender-Diverse Boards via Codes of Good Governance

“…While a mandatory gender quota is clearly a coercive pressure, voluntary self-regulation via codes draws on a different mechanism. The classical institutional model of practice implementation suggests two separate rationales for organizations to adopt practices (Tolbert and Zucker 1983): While early adopters follow an economic imperative, viewing the practice as technically effective ('efficiency'), later adopters respond to the social imperative of 'legitimacy', i.e., they wish to comply with the expectations of their environments (DiMaggio and Powell 1983; see also Gregorič et al 2017). More recent work, however, argues that such a segregation of economic and social logics is not only empirically difficult but also conceptually problematic as efficiency may be socially expected, thereby also representing a source of legitimacy (Höllerer 2013;Lounsbury 2007;Meyer 2004).…”

“…More specifically, we ask: Under which conditions is self-regulation via principles of good governance effective? In our analysis we follow the example of recent studies in the scholarly field of women on boards by applying an institutionaltheory lens to the topic (Carrasco et al 2015;Gregorič et al 2017;Grosvold et al 2016;Perrault 2015;Terjesen et al 2015). We focus on two factors identified in the literature as driving the diffusion of new practices (Kennedy and Fiss 2009) and argue that these also promote the adoption of practices recommended by codes: First, when companies are motivated by the perceived likelihood of benefits such as increased reputation, prestige, or profits; and second, when they respond to the perceived danger of losses incurred by non-adoption.…”