Women on Board and Firm Performance

Rovers, M. Lückerath –

doi:10.2139/ssrn.1586832

Cited by 12 publications

(6 citation statements)

References 29 publications

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“…Haynes and Hillman do not discuss heterogeneous boards in the context of demographic diversity such as race and gender; however, it is plausible that the influence of these demographic factors also impact board social capital and its influence on strategy setting. Race and family background have an impact on social capital (Loury, 1977), therefore supporting the premises of this paper that women and diverse board members may have different types of social capital which can be brought to the board as a potential resource. Loury (1977) argues that the achievements of the individual are based on more than just his or her own efforts, accomplishments and resulting human capital; but are also influenced by those relationships of the family and community.…”

Section: Social Capital and Board Diversitysupporting

confidence: 77%

“…Race and family background have an impact on social capital (Loury, 1977), therefore supporting the premises of this paper that women and diverse board members may have different types of social capital which can be brought to the board as a potential resource. Loury (1977) argues that the achievements of the individual are based on more than just his or her own efforts, accomplishments and resulting human capital; but are also influenced by those relationships of the family and community. Coleman (1988) established that relationships have inherent value because of the access they provide to resources and opportunities.…”

Section: Social Capital and Board Diversitysupporting

confidence: 77%

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Social capital as a new board diversity rationale for enhanced corporate governance

Booth-Bell

2018

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Purpose The benefits of board diversity are often categorized into five distinct business rationales: talent rationale, market rationale, litigation rationale, employee relations rationale and governance rationale. However, if resource dependency theory’s focus on the director’s ability to secure important resources for the firm is considered, social capital as a viable additional rationale for board diversity can also be considered. The purpose of this paper is to argue that diverse members of the board are likely to have social capital that differs from non-diverse members of the board. Consequently, that diverse social capital can bridge the board to new resources for advice and counsel, legitimacy, channels for communication and access to important external elements, thus making a strong argument to be included as a rationale for board diversity. Design/methodology/approach It is intended to provide a conceptual discussion on whether enhancing the board’s social capital is perhaps a viable and overlooked rationale for board diversity. Findings Consistent with the other five rationales for board diversity, this analysis suggests that social capital should be considered as a sixth rationale for board diversity. Social capital serves a role in governance and rises to the standard of other rationales for board diversity. Practical implications Boards may not recognize that social capital is a strategic resource and sufficiently diverse groups such as women and minorities may be more likely to contribute non-overlapping social capital networks, which may translate into greater external influence and thus additional resources for the firm. This paper may help to influence the viewpoints of directors on who is valuable as a board member. Originality/value Existing board diversity rationales do not include social capital as a primary rationale for board diversity. It may be possible that social capital becomes a legitimate sixth rationale for board diversity.

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Section: Social Capital and Board Diversitysupporting

confidence: 77%

Section: Social Capital and Board Diversitysupporting

confidence: 77%

Social capital as a new board diversity rationale for enhanced corporate governance

Booth-Bell

2018

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“…Resource dependence theory. According to resource dependence theory, the presence of women directors on corporate boards links firms with stakeholders and provides legitimacy with regard to several groups of stakeholders such as employees, customers, and investors (Brammer, Millington, & Pavelin, 2007;Lückerath-Rovers, 2010). Indeed, Hillman, Shropshire, and Cannella (2007) and Singh and Vinnicombe (2004) advanced that the presence of women in the boardroom provides a valuable form of legitimacy and signals better career opportunities to both potential and current employees.…”

Section: Corporate Governance and Gender Diversity In The Boardroommentioning

confidence: 99%

Does gender diversity on corporate boards increase risk‐taking?

Loukil¹,

Yousfi

2015

Can J Adm Sci

113

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We study the impact of board gender diversity on firm risk‐taking in a developing market. Our study is drawn from a sample of 30 Tunisian‐listed firms between 1997 and 2010. First, we found that women have a risk perception that leads to risk avoidance behaviour: the presence of women directors, even when there is one woman director, is positively associated with cash ratio. Second, we showed no significant relationship between board gender diversity and the propensity to take strategic or financial risk‐taking. Third, the presence of state officer/bureaucrats and/or politically connected women have a positive effect on cash holding and investment opportunities. Finally, we found that foreign investors do not invest in firms with gender‐diverse boards. We conclude with a discussion of contributions to scholarship and practice, and present avenues for future research. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.

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“…However, previous studies throughout different countries have shown inconclusive outcomes. Low et al (2015) and Luckerath-Rovers (2013) found that women increases company's ability to raise profits through mitigating agency problem by increasing supervision, on the other hand, Adams and Ferreira (2009) believe gender diversity slow down the decision making process due to the lack of good cooperation between men and women. In addition, diversity in upper management can lead to conflict, decline in-group cohesiveness, and decrease in corporate value (Herring, 2009) ABSTRAK JEKT Despite the contradictive opinion regarding this issue, some countries (i.e.…”

Section: Imentioning

confidence: 99%

The Effects of Gender Diversity in The Boardroom on Firm Financial Performance in Indonesia

Linggih¹,

Wiksuana²

2018

j. ekon. terap.

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This research investigates the effects of gender diversity in the boardroom on firm financial performance in Indonesia. To achieve the objective of this study, panel data analysis and fixed effects estimators have been applied to companies listed in Indonesia Stock Exchange in 2014 until 2016. The result of this study indicates that the percentage of women in the boardroom (board of commissioners and board of directors) has a significant positive effect on the company's financial performance as measured by return on assets (ROA). The relationship between these variables is then explained by agency theory where increasing the percentage of women in the boardroom improves the supervision of the company's agents which in return will positively affect the financial performance of the company. The managerial implications and suggestions of this research are that companies should begin to empower more women in the company's top management, also the government should consider a minimum quota policy for women on board of commissioners and directors in Indonesia.

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Women on Board and Firm Performance

Cited by 12 publications

References 29 publications

Social capital as a new board diversity rationale for enhanced corporate governance

Social capital as a new board diversity rationale for enhanced corporate governance

Does gender diversity on corporate boards increase risk‐taking?

The Effects of Gender Diversity in The Boardroom on Firm Financial Performance in Indonesia

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