terjesen2009

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Corporate Governance: An International Review, 2009, 17(3): 320–337
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 corporate boards 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 over 400 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; resource dependency, 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 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
A s recent corporate governance scandals and the
Sarbanes-Oxley legislation, Higgs Review, and other
initiatives draw attention to the importance of corporate
directors of the board, practitioners and academics have
long followed board composition, including the slow
governance, scrutiny has turned to the composition of cor- advancement of women onto corporate boards, despite
porate boards of directors. For example, the demise of the nearly 40 years of equal opportunities policies. A Google
Icelandic bank Kaupthing led to the immediate resignation search reveals 340,000 webpages for female or women cor-
of the entire board of directors (The Age, 2008). In the wake porate board directors, including 25,400 webpages in
of the failure of other financial institutions, such as Google Scholar. Extant research emerges from an interdis-
Lehman Brothers, investors, governments, and concerned ciplinary academic community, across psychology, sociol-
parties around the world are demanding answers to ques- ogy, leadership, gender, finance, management, law,
tions such as that posted in two separate official blogs of corporate governance, and even entrepreneurship. It is
timely therefore to pull together research on the nature and
*Address for correspondence: 1309 E. 10th St, Bloomington, IN 47405, USA. E-mail: impact of gender diversity in board composition as a facet
siriterjesen@yahoo.com of corporate governance.
© 2009 Blackwell Publishing Ltd

doi:10.1111/j.1467-8683.2009.00742.x
WOMEN DIRECTOR ON CORPORATE BOARDS 321
TABLE 1
Women on Corporate Boards: Review Structure
Theory Characteristics Impact
Individual Human Capital Demographics Tokens and minority members

Status Characteristics Social Capital Role models
Gender Self-Schema Human Capital Diversity supporters
Board Social Identity Structure and Size Governance performance
Social Network and Roles Decision making
Social Cohesion Composition Behaviors and culture
Gendered Trust Independence
Ingratiation Skills, knowledge and experience
Leadership
Firm Resource Dependency Size Financial performance (announcements,
Institutional Stakeholder distribution “glass cliff” effect)
Agency Performance 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 Institutional International differences Citizens
Environment Critical Management Within-country differences Talent
Private vs Public initiatives Symbols in media
Cultural attitudes, infrastructure
and public policy
Economic environment
Female representation in corporate decision making studies in existing research streams, as well as major recom-
is an important issue for policymakers. For example, the mendations for new research agendas.
Norwegian government requires that boards of directors of We explore each major theme across four micro, meso, and
publicly held firms be comprised of at least 40 per cent macro levels – individual, board, firm, and industry/
women (Hoel, 2008) and the Spanish government has com- environment. By individual, we refer to the individual
mitted to 40 per cent by 2015 (De Anca, 2008). Around the director, or aspirant director. The board level captures the
world, other countries are considering legislation while processes and interactions that occur within the team. We use
developing economies, such as India and China, and Middle the “firm” category to describe experiences in other parts of
East countries (Tunisia and Jordan) are beginning to recog- the firm, outside the board, and also firm strategy and struc-
nize the importance of developing female talent up to the ture. Industry/environment captures the local, regional, and
board level (Singh, 2008a). national industrial and external environments. While these
To the best of our knowledge, this is the first comprehen- categories are overlapping, given the fluid nature of business,
sive review of extant research on women on corporate we hope this structure guides our reader and aids future
boards (WOCB). We reviewed over 400 published refer- researchers. Table 1 provides an overview of the review.
ences, including articles, book chapters, working papers,
and reports. The literature was identified through EBSCO,
ProQuest, and Google Scholar searches. In-press and THEORETICAL PERSPECTIVES
working papers were solicited by e-mail from 40 scholars of
gender and corporate governance who recently published in The vast majority of academic literature on WOCBs
leading journals or presented papers at conferences. (approximately 160 of 180 published articles, working
In the following sections, we review the literature on papers, and book chapters reviewed) does not explicitly
women directors in three key areas: theoretical perspectives, develop a theoretical framework. Indeed, the majority of
characteristics, and impact. We recognize that there are addi- WOCB literature is descriptive.2 We identified 20 theory-
tional areas, such as initiatives to promote women to direc- based studies of the phenomenon of women on boards that
torships; however we consider these outside the scope of employ a variety of frameworks at micro, meso, and macro
our study.1 A final section suggests directions for future levels. The major theoretical perspectives, and, in most cases
© 2009 Blackwell Publishing Ltd Volume 17 Number 3 May 2009

322 CORPORATE GOVERNANCE
a short synopsis of findings, are described below. Consistent counterpart (Biernat and Kobrynowicz, 1997). Considering
with the feminist mode of inquiry, most studies explore this theory in parallel with women’s traditional “outsider”
theoretical perspectives on what forces explain women’s status, Hillman, Cannella, and Harris (2002) find that
underrepresentation on corporate boards. Several theories women directors are significantly more likely to have an
bridge two or more levels of analysis. For example, gender advanced degree than their male counterparts.
self-schema is an individual perception that can be mani-
fested in groups, firms, industries, and the broader institu- Gender Self-Schema. Self-schema is an individual’s psy-
tional environment. Some studies incorporate two or more chological construction of self, based on a number of
theoretical perspectives. For example, Burke and Nelson aspects, most commonly gender. Gender self-schemas are
(2002) examine how a combination of individual and orga- developed from childhood and serve as mental models
nizational factors explains the exclusion of talented women through which information is processed. Generally, male
from top management. gender self-schemas are based on roles, norms, values, and
beliefs that are considered appropriate for men, such as
Individual income provider, dominance, aggression, achievement,
autonomy, exhibition, and endurance (Konrad, Ritchie, Lieb
At the individual level, theoretical perspectives tend to focus and Corrigall, 2000). In contrast, female gender self-schemas
on the characteristics of WOCBs (e.g., human capital, status are largely based on roles, norms, values, and beliefs held
characteristics, social capital) and the individual’s gender- about women such as homemaker, affiliation to others, nur-
based perceptions (e.g., self-schema, trust). turance, deference, and abasement (Konrad et al., 2000).
These self-schemas are present from the point at which male
Human Capital. Human capital theory (Becker, 1964) and female graduates evaluate and enter the workplace
examines the role of an individual’s cumulative stocks of (Terjesen, Freeman and Vinnicombe, 2007). Gatekeepers
education, skills, and experience in enhancing cognitive and have views of gender-appropriate behaviors, roles, and
productive capabilities that benefit the individual and his/ expectations that may bias executive selection (Oakley, 2000).
her organization. Compared to men, women have tradition-
ally made fewer investments in education and work
experience and this is reflected in lower pay and promotion
Board
(Tharenou, Latimer and Conroy, 1994). Directors bring At the board level, theory focuses on group-level processes
unique human capital to the board (Kesner, 1988) and indi- such as social identity, homophily, and in-out groups. While
viduals must obtain extensive stocks of human capital in composition is important, board processes may be even
order to be considered for directorships (Kesner, 1988). more critical to performance (Huse, 2005).
Gatekeepers, who are mostly male, do not offer women the
same organizational rewards, such as training and develop- Social identity. Several related theories of social groups
ment, nor promotion and pay (Oakley, 2000). A commonly (e.g., attraction-selection-attrition, homophily) explore how
held assumption of board selectors is that women lack individuals seek to surround themselves with people who
adequate human capital for board positions (Burke, 2000). share similar demographic profiles, perspectives, and values,
Singh, Terjesen and Vinnicombe (2008) dispel this myth in which are then reinforced in intragroup communication.
their study of multiple human capital dimensions of new Tajfel and Turner’s (1986) social identity theory describes
directors of the FTSE3 100 firms in the UK, finding that how individuals define themselves according to their mem-
women are more likely to have MBA degrees and interna-
bership in certain groups such as gender, race, class, and
tional experience. Furthermore, compared to their male
occupation. Individuals consider themselves and others as
counterparts, new female directors are significantly more
either in- or out-group members and are more likely to
likely to have experience as smaller firm board directors, but
provide higher evaluations of in-group members, making it
less likely to have CEO/COO experience.
more difficult for out-group individuals to join these groups.
Human capital theory has been extended in other mean-
These theoretical frameworks have been used, indepen-
ingful ways.4 For example, Westphal and Milton (2000)
dently or in parallel, to describe women’s exclusion from
examine the role of a director’s prior experience on his/her
social networks. For example, Kanter’s (1977) work on
ability to avoid out-group biases and to exert influence on the
homosocial reproduction highlights how individuals in
board, finding that women are significantly less likely to have
powerful positions replicate male-dominated power struc-
focal director experience in the majority and to exert influ-
tures in corporations. Leveraging theories of homosocial
ence. Shrader, Blackburn and Iles (1997) leverage resource-
reproduction, Daily and Dalton (1995) describe how CEOs,
based theories of competitive advantage to describe human
who are mostly men, are more likely to lead boards com-
capital as a key resource for the firm, bringing diversity
posed of like others, of similar gender, as well as age, back-
perspectives that facilitate team problem solving.
ground, and experience.
Following Kanter’s (1977) work on tokenism, Erkut,
Status Characteristics. Status characteristics theory de- Kramer and Konrad (2008) explore three dimensions of
scribes how standards of ability for low-status groups (such numerical representation of women – one woman, two
as women) are higher than for high-status group members women, and three women. Drawing on Asch’s (1951) con-
(e.g., men). Thus, to be perceived as being of high ability, a formity theory and the role of vision, they describe how a
woman must provide more evidence than would her male critical mass of three or more women creates “normaliza-
Volume 17 Number 3 May 2009 © 2009 Blackwell Publishing Ltd

tion” where gender is no longer a barrier to communication interlock network. This behavior can help overcome the
and where women directors are more likely to feel comfort- barrier of demographic minority status such as gender.
able, supported, and freer to raise issues and be active.
Westphal and Milton (2000) explore the idea that social Leadership. While not directly developing the research on
exclusion due to minority status (e.g., as a woman) could be gender in corporate board processes, Huse and Solberg’s
overcome through ingratiatory behavior. Social identity, (2006) interviews with eight WOCBs reveal the importance of
social network, and cohesion theories have also been put nurturing contacts, preparing for meetings, and creating alli-
forward as possible explanations for the paucity of women ances, as well as their observations about the presence of
on boards (Singh and Vinnicombe, 2004). power games and unequal decision making in the process.
Huse (2008) develops a conceptual framework that describes
Social Network and Social Cohesion. The elite group can how board leadership, structures, development activities,
be seen as a social network. Social network theory predicts culture, and levels of openness mediate the influence of
that individuals with access to resources valuable to the women directors on task performance. Furthermore, Huse
company are likely to have the best chance of entering the (2008) proposes that women will make specific contributions
elite network. Directors are nodes in a network of organiza- if they have backgrounds, personalities, and behaviors that
tional linkages, and contribute resources such as informa- are different from men on the board and if they are perceived
tion and knowledge to their board, their organization, and and treated as different from their male counterparts.
to other members of the network, sharing power and acting
as a socially cohesive group (Westphal and Zajac, 1995;
Windolf, 1998). A board is a privileged closed group with its Firm
own rules and ways of thinking. Directors facilitate invita- At the firm level, common perspectives include resource
tions to join other boards, by recommending and sponsoring dependency, institutional, and agency theories.
colleagues like themselves, whom they know are likely to
fit the existing mold. As powerful positions are a marker
of relevant experience, contacts, and endorsement, those Resource Dependency. A number of studies employ a
who have held CEO positions are particularly attractive to resource dependency lens that views firms as operating in
the network. Hillman et al. (2002) take a network theory an open system and needing to exchange and acquire certain
perspective in examining how firms may wish to increase resources in order to survive, creating a dependency
their odds of acquiring resources and surviving by becom- between the firm and external units. Within the corporate
ing more central in networks and linkages to other firms. governance literature, firms seek linkages with the most ben-
Their subsample of 89 white female and 99 white male board eficial resources and structure membership on the corporate
members reveals that women directors are more likely to board on this basis. Building on Pfeffer and Salancik’s (1978)
join subsequent boards at faster rates than their male arguments that board linkages provide advice/counsel,
counterparts. legitimacy, and communication channels, scholars highlight
the important resources from directors’ human capital and
social capital.
Gendered Trust. Another line of recent psychological Diversity scholars use the resource dependency frame-
theory enquiry is trust. Bigelow and Parks (2006) leverage work to argue that today’s increasingly complex and uncer-
gendered theories of trust to explore board relationships. tain environment requires leadership from individuals who
While trust is variously defined in the literature, scholars in can provide a breadth of resources including prestige, legiti-
many fields identify gender differences, for example in macy, financing, industrial/functional/geographic knowl-
trusting behavior, with men more likely to have the basis of edge, and diversity. For example, Siciliano (1996) reports
their trust in others, particularly shared group status (collec- that YMCA boards with increased gender diversity are more
tive trust), and women more likely to trust both on this likely to enjoy high levels of social agency mission achieve-
collective trust as well as on the basis of a personal relation- ment, but less likely to achieve fundraising goals, and there
ship (relationship trust) (Maddux and Brewer, 2005). Build- is no relationship to operating efficiency.
ing on research highlighting that women have identifiable Hillman, Cannella, and Paetzold (2000) significantly
traits that make them well positioned for roles that require extend resource dependency theory to diversity on boards,
trust, Bigelow and Parks (2006) report that investors are outlining four director types: “insiders,” “business experts,”
willing to invest 300 per cent more in male-led firms than in “support specialists,” and “influentials.”5 Female directors
female-led firms. of Fortune 1000 boards are more likely to have non-business
backgrounds, to hold advanced degrees, and to join many
Ingratiation. Within the social psychology literature, an boards at a faster rate than their white male counterparts
important dimension of interpersonal influence is ingratia- (Hillman et al., 2002). Women’s representation on boards is
tory behavior to enhance one’s attractiveness and gain favor linked to organization size, industry type, firm diversifica-
with others. Following studies linking ingratiation to career tion strategy, and the network effects of linkages to other
success, Westphal and Stern’s (2006) survey of 1012 top boards with female directors (Hillman, Shropshire and Can-
managers of Forbes 500 firms reveals that top managers who nella, 2007). Peterson and Philpot (2007) leverage resource
display ingratiatory behavior toward their CEO are more dependency theory and the director taxonomy to examine
likely to be appointed to boards of other firms where their the likelihood for female and male directors’ odds of being
CEO is a director or is indirectly connected through a board appointed to a standing committee, finding that women’s

resource dependency linkages lead them to be more likely to public offering, but do not test these ideas in their empirical
be appointed to certain committees, but not others. study. It is important to acknowledge the interrelationships
among these theories. For example, the institutionalized
expectation that women should fulfill caring responsibilities
Institutional. Building on institutional perspectives of
presents a major barrier for women seeking to combine
achieved legitimacy from the promotion of women to stra-
career and motherhood, or increasingly, elder care.
tegic positions in management, Bilimoria (2000) argues that
a female board member presence signals that a corporation
values the success of its women. Bilimoria (2006) extends Critical Management. Adams and Flynn (2005) take an
institutional legitimacy theory to explore the relationship innovative and multi-dimensional critical theory approach to
between the presence of women on boards and the presence better understand how established processes can restrain
of women at multiple levels in the company, finding a posi- change in terms of gender representation on corporate
tive relationship between female corporate board members boards. They identify constraining factors at individual,
and the following: number of women officers; number of group (e.g., psychological perspectives), firm, and external
women officers holding line jobs; presence of a critical mass environment levels and use the knowledge creation
of women officers; women officers with high-ranking or framework to describe how individuals create actionable
“clout” titles; and women among the top corporate earners. knowledge through structural, cognitive, and relational
dimensions of board members and their networks.
Agency. Most corporate governance research takes an
agency theory approach (Aguilera, Filatotchev, Gospel, and
Jackson, 2008). Agency theory describes the relationship CHARACTERISTICS
between a principal (e.g., shareholder) and the agent of the
principal (e.g., directors and managers), often considering A large body of census research, predominantly conducted
the costs of resolving conflicts and aligning interests across in Western countries, reports basic characteristics. This
groups. A common assumption in agency theory is that section reviews literature along the four levels.
outside directors will act independently from their inside
director counterparts and will act as good monitors for
shareholders’ interest. Carter, Simkins and Simpson (2003) Individual
draw on agency theory to explore the link between gender
diversity on a board and firm value, finding a positive rela- Demographics. Since the 1990s, a substantial body of litera-
tionship between the percentage of gender diversity on ture considers the demographics. A consistent finding is that
Fortune 1000 boards and firm value. women directors are significantly younger than their male
counterparts, with comparisons in the range of 53 years for
the UK’s FTSE 100 female directors, compared to 56 for
males (Sealy, Singh, and Vinnicombe, 2007). Australian sta-
Industry and Environment tistics are similar; women’s average age is 53 and men’s is 61
We could not identify any extant theory-based research at (Ross-Smith and Bridge, 2008). Peterson and Philpot’s (2007)
the industry level. Research at the environment level most US Fortune 500 study reports women and men’s average
commonly examines the role of institutions. ages to be 56 and 60 respectively. Burgess and Tharenou’s
(2002) meta-analysis of Australian, US, and Canadian studies
Institutional. Terjesen and Singh (2008) explore the role of find that between 65 and 71 per cent of women directors are
the social, political, and economic structures in the institu- married. Earlier, Burke and Kurucz (1998) find just 47 per
tional environment on women’s share of representation on cent of women directors are married. Women directors with
corporate boards. Their 43 country study reveals that coun- children comprise 44 per cent in Australia and 70 per cent in
tries with a higher representation of women on boards are the US and Canada, although the Australian sample includes
more likely to have women in senior management and more dependent children (Burgess and Tharenou, 2002). Women
equal ratios of male to female pay. However, countries with insiders hold fewer directorships, have less powerful titles,
a shorter tradition of women’s political representation are occupy more staff positions, and earn less than men
less likely to have high proportions of WOCBs. (Zelechowski and Bilimoria, 2004).
The perspective of gender is not only an individual prop-
erty, but also as an institution embedded in the workplace, Social Capital. In the 1980s and 1990s, UK female directors
occupations, and occupational environments through for- were significantly more likely to have a title than male direc-
mally defined rules, roles, and responsibilities and the tors, whether academic (Dr., Professor), aristocratic (Lady,
“habitus” of mental structures through which individuals Honorable), or civic or political (Dame, Baroness); however
think about their social world. Talmud and Izraeli (1999) this is not the case presently (Sealy et al., 2007). In the US, there
argue that these influences are not easily eliminated. is a preference for “branded women” directors, i.e., those
Nelson and Levesque (2007) highlight the presence of with Ivy League universities, signaling upper class status
institutional factors such as occupational sex discrimination, (Mattis, 2000). In a study of women directors in the Middle
childcare responsibilities, stereotypes, and gender schemas East, Singh (2008a) notes that the majority of Jordan’s women
that may influence the presence of women on boards of directors are connected to the controlling or founding family,
high-growth and high potential firms undergoing initial signaling the importance of “wasta” (“connections”).

Westphal and Milton (2000) examine how network ties members (45.5 per cent) than are male IDs (12.9 per cent),
affect minority directors’ influence on the rest of the board, suggesting perhaps that thwarted by a lack of career pro-
finding that a minority director with previous board expe- gression, women leave to start their own businesses. Nelson
rience can mitigate out-group biases. Minority directors can and Levesque (2007) report that women in high-growth,
build social network ties with other directors, enabling them high-potential firms achieve executive roles at a younger age
to create the perception of similarity with the majority than women in Fortune 500, but so do men.
(Westphal and Milton, 2000). In Australia, women who suc- Evidence from the US and UK clearly refutes the claim that
cessfully obtain board positions have long-standing, close women lack the “right” human capital for directorships.
relationships with other female directors (Sheridan, 2001). Women directors’ combination of human capital assets
differs from traditional (and generally more male) accumu-
lation, but brings added value to boards. However, regardless
Human Capital. Hillman et al., (2000) develop a taxonomy of the reality, several studies reveal that it is the perceptions of
of four director roles based on human capital experience: women that are also often a problem. For example, Mattis
insiders, business experts, specialists, and community influ- (2000) cites a Catalyst 1993 survey in which CEOs fear
entials. Women and African-American Fortune 500 firm appointing a women to the board due to a belief that women
directors are more likely to have non-business backgrounds, are unqualified (Burke, 1997) and a concern that they will
hold advanced degrees, and join boards at a faster rate than have a “women’s agenda.” In addition, CEOs are afraid to
their white male counterparts (Hillman et al., 2002). Minority appoint women not currently holding a directorship, but do
groups who gain post-graduate qualifications can compen- not hold the same fear for men (Peterson and Philpot, 2007).
sate for effects of discrimination and subjective bias in selec- Although Heilman and Haynes (2005) present evidence that
tion procedures (Hillman et al., 2002). prior work experience can counteract negative expectations
Peterson and Philpot (2007) conclude that the women cur- of a woman’s performance, women are presumed to be less
rently holding 13.2 per cent of US Fortune 500 directorships competent than men (by both men and women) in a male-
are as highly qualified as men, coming from various positions dominated environment (Carli, 1990). Unequivocally suc-
of power and authority in public and private organizations cessful women are then disliked for contravening gender
(Branson, 2006), government, law firms, not-for-profit orga- roles (Eagly and Karau, 2002), unless they can also prove their
nizations, and academia. The proportion of men and women femininity or communal traits (Heilman and Okimoto, 2007).
categorized as business experts or support specialists (67.1 In Australia, conceptions of leadership include core values
per cent versus 66.8 per cent) is not significantly different. such as heroism, physical and emotional toughness, and
Singh et al. (2008) profile human capital of FTSE 100 board self-reliance (Sinclair, 1998). This masculine ideology of lead-
appointments, finding female appointees are more likely to ership perpetuates the status quo of who looks like a leader,
hold an MBA degree and have minor board experience, and and the perception is that a leader is not a female.
somewhat more experience on international boards. Men are A UK study reports that 40 per cent of CEOs believe
somewhat more likely to have experience in CEO/COO/MD women have not been in the pipeline long enough, com-
roles and women are significantly less likely to be executive pared to only 28 per cent of senior women (Catalyst
directors (EDs) (3.6 per cent), but no less likely to be business and Opportunity Now, 2000). In both the UK and US there
experts (Singh et al., 2008). Both UK and US studies show that are tenure differences between male and female board
women are more likely than men to be community influentials members, but only of approximately two years. Zelechowski
(Hillman et al., 2007; Singh et al., 2008). A somewhat unex- and Bilimoria (2004) point to more significant pipeline
pected finding in Singh et al.’s study was that almost 25 per issues in their study of 40 non-CEO female and 60 non-CEO
cent of women appointed in 2001 to 2004 already had FTSE male IDs. While there are no sex differences in experience-
100 board experience. Women hold significantly more mul- based qualifications of board or corporate tenure, female IDs
tiple directorships; 5 per cent of women, but <1 per cent of hold less powerful corporate titles, fewer multiple director-
men have two or more seats (Sealy et al., 2007). The recycling ships, occupy more staff functions, and earn considerably
of a small group of women means that they become extremely less than male IDs, implying that women are both underval-
experienced as directors. But the recycling perpetuates only a ued and underutilized in the executive suite and corporate
small group of women candidates. For example, of 150 new governance (Zelechowski and Bilimoria, 2004). There are
director appointments in 2007, while 30 (20 per cent) went to clear implications for pipeline theory, since the CEO pipeline
women, only five had not previously held a FTSE board is based on the treatment of and value given to the top IDs
position. Farrell and Hersch (2005) suggest the over- and women do not appear to be as well strategically placed
representation of women with multiple directorships is an to inherit a CEO role as their male colleagues (Zelechowski
argument for a shortage of supply, indicative of a limited and Bilimoria, 2004).
number of qualified candidates. In FTSE 100 firms, the percent of female executive com-
Of Canada’s 278 female directors, 90 per cent are univer- mittee members has increased; 60 companies now have
sity graduates and approximately 25 per cent have one or women in their top team, totalling 16 per cent of senior
more professional designations. However, while the major- executive roles (Sealy et al., 2007). Women’s roles have also
ity are full-time employees (57 per cent), 13 per cent own broadened, suggesting more varied routes to the board.
businesses, 21 per cent serve as independent consultants, Whilst human resources and company secretary roles con-
and about half were less than 45 years old (Burke, 1995). tinue to dominate, there is an increasing variety of other
Peterson and Philpot (2007) find that female Inside Directors roles for women on these committees, including divisional/
(IDs) are significantly more likely to be founder or family regional CEO, MD, CFO, and COO.

Board tions of leadership effectiveness, giving evidence of the need

to have a critical mass. Erkut et al. (2008) discuss how
Structure and Size. Several single-country studies of board
dynamics move from invisibility to conspiracy to normality,
level characteristics exist; however cross-country compari-
and that it is only at that point that the diversity of the group
sons are difficult given the different corporate governance
appears to become a group responsibility.
structures, for example the two-tier system of separate
supervisory and executive boards in parts of continental
Europe and the Middle East (Singh and Vinnicombe, 2003), Firm
and principal and acting board members in some South
American countries (Mulcahy, 2008). A consistent finding is Size. A number of studies report correlations between a
that the larger the board, the greater the number of female firm’s size, by revenue or market capitalization, and the
directors (Hyland and Marcellino, 2002; Brammer, Milling- number of WOCBs (Burke, 2000; Hyland and Marcellino,
ton and Pavelin, 2007; Sealy et al., 2007), however some coun- 2002; Peterson and Philpot, 2007; Terjesen and Singh, 2008).
tries cap the number of directors on their boards. Both in the UK and US the distribution of female directors
decreases the further down the FTSE or Fortune listing,
belying the myth that it is easier for women to succeed in
Roles. Peterson and Philpot (2007) extend earlier studies smaller firms (Sealy, Vinnicombe and Singh, 2008a). Again,
(Kesner, 1988; Bilimoria and Piderit, 1994) that suggest that international comparisons are difficult as some countries’
men and women have different board roles, with women firms (e.g., US) are larger than others.
less likely to serve on key committees. While women are less
likely to be on executive committees and more likely to be on
public affairs committees, gender is no longer a significant Shareholder Distribution. Stakeholder theory purports the
factor in the likelihood of being on the nomination, compen- need to take into account the wider interests of stakeholders,
sation, finance, or audit committees (Peterson and Philpot, which is affected by the concentration of the majority or
2007). In Fortune 500 firms, women IDs hold 6 per cent of minority shareholders (Hillman, Keim and Luce, 2001;
the seats. Again, care must be taken when making interna- Carter et al., 2003). Institutional investors can compel com-
tional comparisons, as this ID figure of 6 per cent represents panies to greater diversity (Gillan and Starks, 2000). Kang,
6 per cent of all female-held board seats. In the UK, female Chen and Gray (2007) find that shareholder concentration is
EDs hold 3.6 per cent (2007) of the total number of ED seats significantly negatively associated with independence and
(Sealy et al., 2007). Using the comparable figure of the gender, although not with age. They imply, therefore, that
female-held seats, the percentage is 10.7 per cent. those organizations with higher shareholder concentration
are not under as much pressure to promote board diversity.
Composition. Corporate governance reforms in the US and
recommendations made in the UK by the Higgs Review Performance. Women directors’ impact on the board is
(2003) have resulted in a better balance between executive covered in the next major section of this review; here we
and non-executive positions and greater diversity (Arfken, consider performance as a firm characteristic. Women are
Bellar and Helms, 2004). For example, in the UK, 2007 wit- more likely than men to serve in precarious management
nessed the lowest number of executive and total director- positions, a phenomenon Ryan and Haslam (2005; 2007)
ships in recent history, suggesting keen competition for describe as the glass cliff. This organizational context makes
executive seats (Sealy, Singh and Vinnicombe, 2008b). This is it harder for women to perform and be perceived to perform
often cited, however, as an explanation of why women have effectively. However, Farrell and Hersch (2005) report that
achieved non-executive director (NED), but not ED, roles.6 women tend to serve on boards of better performing firms
Daily, Certo and Dalton (1999) track changes in Fortune 500 and suggest that a shortage of supply allows women to
WOCBs between 1987 to 1996, noting a significant increase self-select the firms, or that these firms are able to focus more
in the number of female directors and the number of com- on diversity goals. Fortune’s top diversity-promoting firms
panies with female directors, but no increase in the number (1998–2002) experience positive, significantly abnormal
of female CEOs (2) and a decline (from 11 to 8) in the returns on the female director announcement date (Ellis and
number of female IDs. Given that a stint on a board as an Keys, 2003). Similarly, of 353 Fortune 500 companies (1996–
ID/ED is the most common route to being a CEO, Daily et al. 2000), the 88 with the highest representation of women on
(1999) conclude that the number of female CEOs is unlikely top management teams experienced significantly higher
to grow substantially in the near future. In a separate study returns on equity and total return to shareholders compared
of Fortune 500 firms in the 1990s, Farrell and Hersch (2005) to the 89 firms with the lowest female representation (Cata-
report that the likelihood of a firm adding a woman to its lyst, 2004). Hillman et al. (2007) find when a firm is linked to
board is significantly negatively affected by the percentage other firms with female directors, it is more likely to have
of WOCBs in the previous year. The probability is greatly WOCBs. All this, however, is exploring a link between
increased when a female director leaves-companies are gender diversity and performance, not establishing causal-
likely to want to replace a woman with another woman, ity. Shrader et al. (1997) describes evidence of some negative
clearly showing that gender impacts the choice of director. accounting measures and WOCBs, but as Erkut et al. (2008)
Erkut et al.’s (2008) interviews with 37 WOCBs, 12 CEOs, also suggest, a critical number of female board members is
and seven company secretaries reveal different dynamics needed before they can exert a positive influence, and most
when there are one, two, or three women on the board. of their sample have only one female director. Nelson and
Academics have long challenged individualistic explana- Levesque (2007: 214) argue that organizations undergoing

regulatory and market review during initial public offering are in the workforce (national average = 48 per cent). Helms,
have a “greater opportunity and motivation to design a gov- Arfken and Bellar (2007) monitor Tennessee, with lower
ernance structure that responds to public concerns about than national and international statistics on WOCBs and a
independent oversight” and therefore a more diverse leader- suggestion that the American South is less accepting of
ship. However, as the high-growth, high potential firm gender diversity.
struggles to “join the big boys,” it may also become institu-
tionalized in terms of trying to look more like their aspirants,
Private versus Public Initiatives. In Australia, there is no
discarding distinctive practices and conforming to a norm. In
formal requirement for private or listed companies to con-
their sample of 100 IPO and 100 Fortune 500 companies,
sider board diversity, in contrast to the government sector,
Nelson and Levesque (2007) identify only one female CEO
which has 30 years of public policies to ensure boards are
and one female board chair. There are higher percentages of
diverse or reflect the broader community (Ross-Smith and
WOCBs in the Fortune 500 than the IPO companies, and for
Bridge, 2008). Similarly in New Zealand, a microcosm of
technology intensive or venture-capital-backed firms, the
Western business, with only 1600 companies with more than
percentages are the lowest. In the IPO firms, almost 60 per
100 employees, women hold just 7 per cent of board direc-
cent of executive teams and 80 per cent of boards do not have
torships, and 63 of the top 100 companies have no WOCBs
a single woman director, compared to Fortune 500 figures of
(MacGregor and Fontaine, 2006). In contrast, women consti-
41 per cent and 14 per cent respectively.
tute over 35 per cent of state sector board directorships
(Hawarden and Stablein, 2008). These contrasting findings
Industry and Environment point to the danger of averaging national statistics, which
would lead to misrepresentation.
A number of studies present correlations between particular
industry sectors and an increased number of WOCBs, e.g.,
retail, finance, media, banking, and health care (Fryxell and Cultural Attitudes, Infrastructure, and Public Policy. Dif-
Lerner, 1989; Hyland and Marcellino, 2002; Brammer et al., ferent countries’ socio-political beliefs and attitudes to
2007; Hillman et al., 2007; Sealy et al., 2007; Joy, 2008). women, work, and families have significant effects on both
However, findings are inconsistent and there are discrepan- the possibility of an individual woman’s career progression
cies on the index of companies as to what types of organi- and the country’s macro-economic environment. Within
zation are included. Kang et al. (2007) find industry type is Europe contrasting attitudes, and therefore policies, led to
significantly associated with independence and age, but not some of the highest and lowest rates of WOCBs globally (see
gender diversity. Figure 1).
As previously mentioned, based on resource dependency Some European countries have strong public policy initia-
theory, one might expect more women directors in indus- tives. Traditionally considered a country with a strong macho
tries with a higher female workforce (Hillman et al., 2007). culture, the Spanish government requires 40 per cent female
However, the opposite is not necessarily true as Sealy et al., representation on boards by 2015 (de Anca, 2008). Spain is
(2007) show: FTSE 100 companies in male-oriented indus- following Norway’s example, where the government first
tries (mining, oil) have women in their top positions. encouraged and then mandated that all publicly listed com-
Brammer et al. (2007) also suggest that close proximity to panies have 40 per cent female boards by January 2008 (Hoel,
consumers plays a more significant role in affecting board 2008). Sweden proposed quotas and fines but has not yet
diversity than does industry workforce, reflecting the influ- implemented legislation (Maitland, 2004). Changes in many
ence of a firm’s external business environment. European women’s working lives are predominantly driven
by public policy, and it will be interesting to see if corporate
initiatives will now take advantage of this talent pool. The US
International Differences. One challenge in making inter-
model is in stark contrast to Europe as the impetus for demo-
national comparisons is the lack of a universal set of mea-
graphic change comes almost entirely from private initiatives.
sures. For example, the European Professional Women’s
Former Soviet Bloc countries are among the highest ranking
Network (2008) uses a varying number of companies from
for women in management (Wirth, 2002) and on corporate
each European country and takes no account of firm size or
boards (see Figure 1). Under communism, women worked
board structure. Generalizability of findings across national
and had families. Highly subsidized childcare was the norm,
boundaries is difficult due to different cultural, economic,
and in an egalitarian social system, women gained relatively
and regulatory environments (Kang et al., 2007), capital
powerful social and economic positions. As Wittenberg-Cox
markets (Joy, 2008), sample sizes (Burgess and Tharenou,
and Maitland (2008: 206) share in their recent book, “it is no
2002), and effectiveness of government mechanisms.
surprise that Germany’s first female Chancellor, Angela
Merkel, is an East German. She was raised in a system that
Within-Country Differences. As much as national differ- taught her to think she could lead.”
ences, within larger nations such as the USA, there may also Terjesen and Singh’s (2008) institutional perspective
be significant regional differences. Goodman, Fields and examines social, political, and economic macro-
Blum (2003) focus on medium to large companies in environmental forces: presence of women in senior manage-
Georgia, whereas Hyland and Marcellino (2002) study Long ment, women’s historical role in government leadership,
Island, the fourth most affluent region in the US, where 31 and the gender pay gap. Based on a 43 country dataset, they
per cent of individuals have a first degree (national aver- report that in countries where more women made it to the
age = 17 per cent) and 56 per cent of women age 16 or over boardroom, there are also significantly more women in

FIGURE 1
Percentage of Women on Corporate Boards
25
% of Women Directors on
20
Corporate Boards
15
10
New Zealand
Luxembourg
Netherlands
South Africa
Switzerland
Czech Re
Argentina
Lithuania
Thailand
Singapore
Australia
Portugal
Slovenia
Bulgaria
Slovakia
Germany
Hungary
France
Romania
Denmark
Ireland
Iceland
Belgium
Finland
Estonia
Austria
Croatia
Turkey
Norway
Sweden
Cyprus
Canada
Mexico
Greece
Latvia
Brazil
Italy
Japan
China
Spain
Chile
USA
UK
Source: Terjesen and Singh (2008)
senior management and legislature positions, smaller more positive. Importantly, diversity becomes not a
gender pay gaps, and, interestingly, a shorter period of “woman’s issue,” but group responsibility and the critical
women’s political representation. mass normalizes women’s presence as leaders (Erkut et al.,
2008).
Economic Environment. Many of the studies incorporate
data from the economic boom period of the 1990s, which Role Models. Women directors are role models who inspire
Nelson and Levesque say should represent the best-case others. Role modeling differs from mentoring where there is
scenario for women. However, Arfken et al. (2004) point to a direct contact between partners, but many mentors are also
peak of merger and acquisition activity in 2000, with many role models. Some women directors are careful about their
organizations merging their boards as well as their compa- role modeling behaviors, so they present an accomplished
nies. This led to a reduction in the overall numbers of avail- self (Singh, 2008b). Executives below director level, espe-
able positions, which limits the opportunity for board cially women, watch and learn what to do and what not to do.
diversity. Women directors are an important part of others’ work
identity development (Sealy and Singh, 2006). Sealy (2008b)
explores whether role models are important for senior
IMPACT women and investigates how organizations select and profile
top women, some of whom are FTSE 350 non-executive
Individual directors.
Token and Minority Members. Women and others differ-
ent to the dominant group are likely to face tokenism when Diversity Supporters. While women at lower levels in
they are the sole representative of their group characteristic firms may hope that female directors will advocate women’s
(Kanter, 1977). The dominant group tends to see women issues, there is evidence that this may be a “poisoned
first as female, embodying the sex role stereotype, and only chalice” that many senior women are reluctant to accept
later as individuals. This makes it difficult for women (Ashford, Rothbard, Piderit, and Dutton, 1998). Perhaps
directors to be heard, and importantly, listened to on an WOCBs understand better the political arena and are more
equal basis with other board members. Erkut et al. (2008) aware of the consequences if they were to fail. Bradshaw and
find that such issues are reduced when there is more than Wicks (2000) find that Canadian WOCBs do not have a femi-
one female director. They refer to a critical mass, as when nist change agenda, but see their role with the same priori-
there were two or more women and found an impact on ties as those of male directors, protecting shareholder value.
male colleagues, who were less likely to dismiss comments Bradshaw and Wicks (2000) express surprise at how few acts
made by a woman and an impact in the boardroom, where of resistance were reported by their female director inter-
the culture was said to have been warmer and more open viewees. Women directors in engineering firms advise other
to wider discussions. The real change occurs when there women not to be crusaders, but rather engage leaders to take
are three or more women on the board (Erkut et al., 2008) up the advocacy role (Singh, 2008b), and to follow the “tem-
and women feel more comfortable, less constrained about pered radical” (Meyerson and Fletcher, 2000) small wins
what the men would think, and their interactions become approach in their own divisions.

Board their presence makes the board more sensitive to women’s

issues (Burke, 1997).
Governance Performance. A Canadian study of private
Singh (2008b) examines gendered boardroom cultures in
sector, public sector, and not-for-profit boards (Brown,
engineering, high technology, and scientific organizations.
Brown, and Anastasopoulos, 2002) reveals that boards with
Directors with experience of working with women directors
three or more women are significantly different from all
say that men are inclined to have very political behavior that
male boards. Three-quarters of boards with women explic-
is tempered when women are present, partly because
itly identify criteria for measuring strategy, compared to less
women want to get on with the task in hand rather than
than half of all-male boards, and 94 per cent of boards with
“play games.” Other comments are that a male-only group
three or more women explicitly monitor the implementation
can get carried away with the big agenda and miss a lot of
of corporate strategy, compared to only two-thirds of
the detail that women would pick up on. Male directors say
all-male boards (Brown et al., 2002). There are similar statis-
that in the presence of women directors, men change their
tics regarding conflict of interest guidelines and ensuring a
language, become more civilized, and moderate their mas-
code of conduct for the organization. Furthermore, boards
culinity. In their view, this led to more effective performance
with two or more female directors place more importance on
and better governance.
the use of search consultants than other boards, which is
likely to reduce the influence of the old boys’ network and
increase transparency of selection. Boards with women On Board Independence. Women directors can enhance
directors are also more likely to have higher levels of board the independence of the board (Fondas and Sassalos, 2000).
accountability, with formal limits to authority and formal Izraeli (2000) comments that women are likely to take the
director orientation programs. Boards with three or more role seriously, preparing conscientiously for meetings, a
females are likely to ensure more effective communication finding echoed by Huse and Solberg (2006). Women direc-
among the board and its stakeholders. In addition, such tors also frequently ask questions, meaning that decisions
boards are significantly more active in promoting non- are less likely to be nodded through. CEOs report that
financial performance measures such as customer satisfac- women become more vocal and active as directors when
tion, employee satisfaction, and gender representation, as there are three or more females (Konrad, Kramer and Erkut
well as considering measures of innovation and corporate 2008).
social responsibility.
In the UK, FTSE 100 firms with women directors adopted On Board Skills, Knowledge, and Experience. Women
and reported the new governance practices recommended directors contribute unique skills, knowledge, and experi-
by the Higgs Review earlier than firms with all male boards. ence to their boards, but their feminine attributes may be
The significant differences in 2004 include having director masked in boardroom cultures that do not allow expressive
induction and training, a regular review of board perfor- behaviors. This can lead to the board having female repre-
mance and the balance of board skills, knowledge and expe- sentation, but only masculine behaviors, losing the benefits
rience, and director succession planning structures, of diversity (Sheridan and Milgate, 2005). Some CEOs have
including approval for the use of external search consultants to persuade female and male directors that it is okay to
(Singh and Vinnicombe, 2004). express intuition and emotion, and that “feminine intuition”
about some proposed strategy might well be just what the
board needed to hear (Singh, 2008b). While this is an essen-
Decision Making. Better corporate governance is achievable
tialist view of female talents, emotional intelligence of both
through sharing a broader and different range of experiences
women and men is increasingly valued at the very top.
and opinions (Fondas and Sassalos, 2000). Homogenous
boards tend not to recognize how similarly members think
because these values are the norm for them (Maznevski, Firm
1994). Women have different experiences of the workplace, Corporate Financial Performance. Many researchers ex-
marketplace, public services and community, and therefore plore the impact of women directors on firm level financial
women directors bring a different voice to debates and deci- performance, reporting mixed results, although more posi-
sion making (Zelechowski and Bilimoria, 2004). tive relationships are found in recent studies. There is cer-
tainly a relationship between the presence of women
On Board Behaviors and Boardroom Culture. Women’s directors and higher market capitalization in Fortune 500
boardroom presence leads to more civilized behavior and (Catalyst, 2004) and FTSE 100 firms (Singh, Vinnicombe and
sensitivity to other perspectives (Bilimoria, 2000; Fondas Johnson, 2001; Singh and Vinnicombe, 2003). In the FTSE 100
and Sassalos, 2000). Huse and Solberg (2006) report that study, the larger the firm’s market capitalization, the greater
women lighten up the boardroom atmosphere. However the likelihood is for multiple women directors, however
Huse (2008) finds no relationship between the proportion of market capitalization can be seen as a proxy for size. Firms
women directors and the openness of the board culture in with women directors are more likely to have larger work-
Norwegian firms, but when women’s backgrounds differ forces, as well as larger boards (Burke, 2000; Singh et al.,
from those of men, their contributions to the board working 2001). The internal talent pool is larger, arguably providing
style are recognized. Huse warns that teasing out how more opportunities for challenge and growth, and more
women actually contribute is complex, because women con- routes to the top for women than in smaller firms.
tribute in different ways to the variety of governance tasks Research studies use a variety of performance measures to
that the board is entrusted with. Women directors feel that examine the link with board diversity, but results are mixed.

A study of 200 Fortune 500 firms by Shrader et al. (1997) Haslam, 2005). Poor performance is not associated with a
finds that the percentage of women on the board (averaging recent appointment of a female director, and during a
eight per cent in these firms in 1992) is negatively related to general economic downturn, companies that appointed
firm financial performance (ROE, ROA, ROI, and ROS) mea- a woman enjoy share price increases, though still suffer poor
sured in 1993, but positively related to the proportion of performance. When in executive positions, new women
women in management. directors are highly visible and in danger of being criticized
Drawing on 1993 and 1998 data for 112 Fortune-listed for their leadership style and individual abilities, which
firms, Erhardt, Werbel, and Shrader (2003) examine the link could result in a tarnished reputation if the downturn con-
between executive board diversity (25 per cent; measured as tinued, while the context of their appointment at an unpro-
the percentage of nonwhites and females on the board in pitious time was overlooked (Ryan and Haslam, 2005).
1997 and 1998) and ROA and ROI, using a five year interval Adams, Gupta and Leeth (2008) investigate female leader-
to control for market fluctuation. They report a positive asso- ship appointments in US firms (1992–2004), finding that
ciation with both financial indicators, suggesting that board women tend to be appointed to CEO positions when firm
diversity impacts overall firm performance, but not gender performance is relatively good. Stock price performance pre-
diversity. ceding CEO appointments either favors females or there is
Another study of 797 Fortune 1000 firms’ board diversity no gender difference.
finds that compared to firms with all-male boards, firms with Haslam and Ryan (2008) further investigate WOCB
at least two women on the board performed better on Tobin’s appointments on both accountancy-based and stock-based
Q and ROA (Carter, Simkins and Simpson, 2003). However, measures, finding no relationship between women’s pres-
Rose (2007) reports no relationship between Tobin’s Q and ence on boards and “objective” accountancy-based mea-
gender diversity on Danish boards, and speculates that sures of performance (ROA, ROE), thereby supporting the
women directors are so few and the culture so closed at the recent Adams et al. (2008) study. However, there is a signifi-
top (only four per cent of supervisory directorships held by cantly negative relationship with Tobin’s Q (Haslam and
women) that assimilation of the attitudes and behaviors of Ryan, 2008).
existing male directors becomes inevitable for WOCBs, Although these studies indicate mixed results regarding
leading to a negation of women’s diversity advantages. the relationship between WOCBs and various measures of
The presence of multiple female directors is associated financial performance, this should not diminish the validity
with higher revenues, according to a study by Catalyst of the view that gender diversity in the boardroom is ben-
(1997) of the Fortune 500 firms, where the top 100 companies eficial to shareholder value. After a new male director is
by revenue are twice as likely to have multiple women on appointed, if there is a change in shareholder value either in
board compared to the bottom 100 companies. Burke (2000) the immediate or longer term, this would be unlikely to be
also finds a similar correlation in top Canadian companies. attributed to his male gender – so why should we expect a
Catalyst (2004) reports a positive link between gender diver- female appointee to add directly to the corporate bottom
sity on boards and the bottom line as measured by return on line? We expect female directors to add value in many quali-
investment and total return to shareholders in a sample of tative ways as indicated in this paper, which would not be
353 Fortune 500 companies, with ROI being 35 per cent and discernable directly in the balance sheet in the short term.
TRS being 34 per cent higher in the group of firms with Diversity is part of exemplary corporate governance that
higher female representation in the top management team. enhances long-term shareholder value (Robinson and
Dechant, 1997; Brown, Brown and Anastasopoulos, 2002).
Female Director Appointment Announcements. The im-
mediate impact when a female director is appointed is
Shareholders and Ethical Investors. Bilimoria (2000) draws
another area of research interest. A study of Singapore firms
attention to the fact that powerful investors, such as union
finds a positive 2.3 per cent increase in share value over the
pension funds with many female members, are voicing con-
two days following appointments of 34 female directors in 30
cerns about the lack of gender diversity on US corporate
firms between 1988 and 2001, and this is enhanced when the
boards, and that this would increase pressure on chairs and
new appointment is a female CEO. However there is no
CEOs to encourage female director appointments. Echoing
relationship between the proportion of women on the board
this, Brown, Brown, and Anastasopoulos (2002) comment
and shareholder value (Ding and Charoenwong, 2004).
that Canadian institutional shareholders are interested in
Hence women directors are welcomed by Singaporean inves-
board diversity, as they seek to invest in firms with good
tors at the time of their appointment. Lee and James (2007)
governance. Investors may see outcomes of good diversity
investigate the impact of appointment of female CEOs in the
management (such as women on the board) as an indicator
US on shareholder value, finding a more negative reaction to
of forward planning and future value in a globalizing world
a female CEO compared to a male CEO and to female top
where sensitivity to different cultures and diversity is essen-
team appointments, but less negative to a female CEO
tial for long term survival. Companies with all male boards
appointed from within the firm, compared to an outside hire.
or those that have a large female workforce, or sell products
targeted at women are particularly likely to be challenged by
“Glass Cliff” Effect. The “glass cliff” phenomenon de- stakeholders. Women are increasingly the decision makers
scribes how women are more likely than male directors to be when it comes to major purchases such as houses, cars, and
placed in precarious situations (i.e., onto boards of poorly holidays. Women directors may suggest new ways of bring-
performing companies in periods of decline) (Ryan and ing products to market, based on their personal experience

as female customers. Where companies use market segmen- on their board, rising to 69 per cent when there are female
tation approaches, women’s involvement in strategic deci- executive directors (Singh, 2008b). Seventy percent of the
sion making is essential in developing the firm’s capability women strongly agree that when there are no women at the
to identify and tailor products to women (Daily et al., 1999). top who have children, this is an indicator that it is difficult
to combine career and family in that organization.
Corporate Responsibility and Philanthropy. WOCBs may Women directors provide mentoring and networking
impact corporate responsibility, as a study of corporate opportunities for more junior women to develop their
social responsiveness orientation in S&P firms indicates careers (Bilimoria, 2000). Women directors are good at net-
that women directors are more oriented towards discretion- working with other women (Catalyst, 1995) and often act as
ary elements of corporate responsibility than men (who are speakers at networking events, which women find very
more concerned about economic performance). However, inspiring, and an opportunity to ask how the director had
there are no significant gender differences with regard to overcome the career and work/family challenges that
the legal and ethical dimensions of corporate responsibility attendees are experiencing (Singh, Vinnicombe and Kumra,
(Ibrahim and Angelidis, 1995). Favored explanations are 2006). These interactions increase the potential for women to
that women are more likely to be outside directors, and find a wider variety of female role models, enabling them to
boards with more outsiders tend to be more philanthropic, emulate behaviors from a number of women as well as men,
or that women directors are younger and hence represent a which Ibarra (1999) suggests is more beneficial than
generation gap. Williams’ (2003) study of Fortune 500 firms drawing on a single role model.
from 1991–94 finds a link between WOCBs and the firm’s
charitable support of community and cultural activities, but Recruitment and Retention. The presence of female direc-
not for education. Williams (2003) suggests that women tors symbolizes career possibilities to prospective recruits
directors may experience the influence of giving as a source (Sealy, 2008a) and also contributes to increased retention of
of power, and speculates that as women take up more pow- women (Bilimoria, 2000). This is important when the eco-
erful committee roles, they may be less attracted to these nomic cost of losing a well-qualified woman is estimated as
aspects of corporate responsibility. Organizations with at least one and a half times her salary (ABA, 2000).
more equal representation of female and male board
members are more able to fulfill social agency missions
(Siciliano, 1996). Industry and Environment
We did not find any example of the impact of women direc-
tors at the industry level. However, we did find examples at
Organizational Legitimacy and Corporate Reputation. the environmental level.
WOCBs have symbolic value both internally and externally.
Where women hold executive directorships, firms are likely
to gain legitimacy from female employees and from poten- Citizens. Women’s presence as directors signifies that
tial recruits as “female-friendly employers” with career women play a full part as citizens of organizations and
tracks that advance women as well as men (Sealy, 2008a). society. However, for them to have voice as citizens, the
Having women on the board, particularly in executive posi- environment needs to be open to their influence, and in the
tions, makes it more difficult to claim that there is significant past, the women who succeeded were pioneers or “travellers
sex discrimination in the firm. CEOs surveyed as early as in a male world” (Marshall, 1984). More recently the trend is
1995 (Catalyst, 1995) comment that there is external political for “superwomen”: highly paid, working all hours, and
pressure and the feeling that it was the right thing to do. flying around the globe. But for many, that comes at a
Interestingly, one CEO reports pressure from his wife, personal cost, either not having children or outsourcing
daughters, and granddaughters who were scrutinizing his childcare.
performance on recruiting women to top positions!
Talent. Women directors are part of the talent pool for other
directorships. Executive directors may seek their first non-
Other Women, in Networks, as Mentors, as Inspirational
executive post, or plan to move into a portfolio career with
Role Models. The number of women corporate directors on
several NED positions. As part of the talent pool, women
Fortune 500 boards is positively related to the number of
influence perceptions held by search consultants about the
women officers, number of women holding line manage-
appropriateness of women for board appointments. They
ment jobs, number of women holding high-ranking titles,
also influence and normalize the attitudes of chairs and
number of women in the top earners of the company. and a
CEOs that women should be part of the talent pool at all
critical mass of women officers, the (Bilimoria, 2006). Senior
levels.
women felt inspired when the first female director is
appointed to an engineering board, seeing the appointment
as a “huge milestone.” However the absence of women at Symbols in Media. When women are appointed to corpo-
board level leads to mixed results, with some women deter- rate boards, there is often a press fanfare that the glass
mined to be the first female director, and others feeling that ceiling has at last been broken, which Catalyst and Female
their gender is an inevitable barrier to the top (Singh, 2008b). FTSE indices clearly disprove with the almost imperceptible
In a survey of 219 senior women, 66 per cent feel very change in the proportion of women executive directors in
optimistic about their careers if there are women directors both the US and UK over the last 10 years. Female directors’

FIGURE 2 possibilities of progress for women. Firm and environment

Characteristics and Outcomes of Gender Diversity on level characteristics combine to influence selection of
Corporate Boards women CEOs, as in the “glass cliff” effect. Social, political,
and economic environmental characteristics such as national
Individual Board or regional cultures and government mechanisms also influ-
Director Characteristics Firm Environment ence board selection processes, e.g., through quotas as in
Diversity Human, Social & Characteristics Characteristics Norway, enabling women to play full citizenship roles in
Characteristics Cultural Capital
society. More female directors means an increase in poten-
tial role models for younger women, which can change the
environment and attitudes towards women on the board.
More women gaining non-executive directorships means
Individual Board Processes Firm Environmental
level Processes Board Behaviors Processes Processes
that search consultants have a larger and experienced talent
(e.g., tokenism, Board Selection (e.g., mentoring (e.g., more women pool which to make their recommendations.
advocacy) Board Culture retention) role modeling) It is clear from this review that women play an influential
role on corporate boards, but there are still major barriers to
their access to such elite positions. When boards do include
Board & Firm Outcomes Environment
women, then there is evidence that corporate governance
Outcomes for improves. We conclude with a detailed outline of future
Governance (e.g., financial, Outcomes
Individuals
(e.g., board
Outcomes reputational, (e.g., views research directions at the four levels.
(e.g., wise & social of search
interlocks)
decisions) performance) consultants)
FUTURE RESEARCH
Individual
photographs are frequently displayed in the press, often As extant literature is predominantly based on publically
alongside comments on their clothes, hairstyles, and family available information, truly innovative research would tap
status, using space that could be better allocated to their into the female directors’ experiences. Several directions are
achievements and actions (Krefting, 2002). Unfortunately promising. First, as both Sheridan and Milgate (2005) and
this practice shows no sign of diminishing. Huse and Solberg (2006) report that women directors partly
Figure 2 maps out the linkages described above across the attribute their selection to high visibility, an impression
four levels of analysis. With the key path shown in bold with management lens could help answer questions such as:
larger arrows and indirect paths shown as dotted lines, How do WOCBs manage their career stages? What strategies
Figure 2 shows that through human, social, and cultural are applied in the public domain versus in the boardroom?
capital, board diversity is derived from individual director A second promising area, also outlined by Ross-Smith
diversity (especially where there is a critical mass of and Bridge (2008) and Zelechowski and Bilimoria (2004), is
women). Through board level processes such as quality of the elaboration of director profiles including career paths
decision making, board diversity influences governance out- and networks. Such in-depth investigations, traditionally
comes, which in turn, impact firm level financial, social, and facilitated by archive data, could benefit from interviews and
reputational outcomes. the utilization of life history calendars that take into account
Board processes are influenced by and influence indi- portfolio career perspectives (see Freedman, Thornton,
vidual directors. For example, minority directors often Camburn, Alwin and Young-DeMarco, 1988 for an overview
experience tokenism from other members both at an indi- of methodology). Research could explore the dynamics of
vidual and group levels. Tokenism may hinder acceptance the appointment process, considering a 360-degree perspec-
of women’s boardroom contributions, thereby negatively tive to capture the reasons for successful and unsuccessful
impacting performance, but this may be mitigated by social applications. Furthermore, WOCBs’ post-board careers
ties to existing board members. Through advocacy of a warrant further study. What linkages might former directors
woman director by a chairman, for example, individual make between their old boards and their new positions? For
women may achieve positive outcomes such as increased example, until 2006, Lehman Brothers’ board included Dina
confidence and interlocking directorships. Such personal Merrill (a former actress who is now a trustee to several
outcomes may influence the environment as chairmen and community organizations) (Berman, 2008; Wikipedia, 2008).
search consultants generally become less hostile to appoint- Might other former directors join universities as executives-
ing diverse individuals. in-residence? Furthering career perspectives, we concur
Firm characteristics such as larger size influence board with Nelson and Levesque (2007) that much could be
characteristics, with a consistent correlation between market learned from women who exited. Key questions from a
capitalization and the number of women directors. Firms career perspective include: When and why do potential or
with predominantly female consumers are facing increasing actual women directors “opt out” (Mainiero and Sullivan,
calls for women’s voices to be heard in the boardroom. Firm 2006)? In terms of human and social capital theories, extant
characteristics and processes such as succession planning research has examined “what it takes’ to be named to boards
schemes and mentoring programs influence retention, often – might there be potential sets which are unattractive in
assisted indirectly by female directors who symbolize the the selection process, for example an association with a

company which has bankrupted? Research could explore the direct outcomes of having more WOCBs and look at
gender differences. when and how women contribute most effectively in their
Third, if some women have many board appointments role as corporate board directors. Other key questions
available to them (Farrell and Hersch, 2005) and given the include: How do WOCBs impact relationships with key
increased responsibility of being on a board and the pres- stakeholders such as fund managers or individual potential
sure for limited directorships, what are women’s selection employees? What role do women directors play in various
criteria for serving on boards? Many of the above research corporate social responsibility initiatives as well as sustain-
questions, as well as below directions for board and firm ability as a facet of corporate cultural and life cycle planning?
research, could be explored using narratives from published
autobiographies, such as Carly Fiorina’s (2007) memoir Industry and Environment
Tough Choices.
As explained earlier, industry research is uncommon.
Thomas’ (2001) longitudinal study of female directors in top
Board British retailing firms (1956–1997) introduces a standard for
The “black box of the boardroom” has eluded most research in other sectors. Why are WOCBs found in certain
researchers – with Huse’s (2008) board observations an industries? Do women directors move across industries?
exception. Researchers could help answer the tough ques- Are women entering the workforce aware of role models in
tions, especially in the wake of recent corporate governance certain industries, and does this affect their occupational and
failures: What role have WOCBs played in the pre-crisis organizational choices?
decisions and post-crisis leadership of such corporations? Initial investigations into the effects of regulations such as
Are WOCBs likely to be members or chairs of the increas- Sarbanes-Oxley Act (2002) and recommendations in the
ingly common board ethics committees and governance Higgs Review (2003), which do not explicitly detail guide-
committees? lines on diversity by sex, suggest these have nevertheless
It would be interesting to obtain the views of chairs and impacted the accessibility of board positions to women
other board members about the relative usefulness of (Sealy et al., 2007). Further questions here include: What
diverse human capital and social capital resources of incom- impact do non-sex diversity initiatives have on WOCBs?
ing directors once they have been fully integrated into the As globalization brings new arenas such as China, India,
board and its key committees. Might there be ambiguous Brazil, and Russia under the spotlight, it would be useful to
resources that never come to fruition? How does the chair’s understand how the globalizing environment influences
view compare with that of the other directors? women getting to the board. Another area of interest is the
Another stream could explore the board’s link to other fast-modernizing Middle East, where corporate governance
firms, such as executive search consulting firms. How do and stock markets are not yet mature, but increasing access
these firms participate in board recruitment and skills assess- to education for women and changing career and family
ment? Does gender diversity play a role? patterns are influencing the access and participation of
Links should be developed with other disciplines, such as women at decision-making levels in the business world.
corporate environmental studies, to identify how boards Most firms are required to report their corporate board
with women directors actually deal with increasingly impor- demographics in proxy statements and annual reports, but
tant environmental issues. Do WOCBs take a different in most countries it is not mandatory to report this informa-
perspective in boardroom debates on corporate social tion on the entire executive team. We know little about the
responsibility, green environmental issues, or policies that impact on industry, and how women’s wider range of expe-
influence the environment for employees on issues such as riences in private and public sectors influence the commu-
work/life balance? nity, for example as school governors and mentors to
teenage girls.
As the lack of female access to corporate boardrooms is an
Firm international phenomenon, the field would benefit from
There are suggestions that some firms address the visible further international studies. More countries (led by Catalyst
lack of diversity by appointing a single non-executive/ in the US and Canada) now conduct a census of WOCB. The
outside director, rather than addressing the longer-term European Commission regularly updates WOCB statistics
issue of an underdeveloped talent pool of senior women. on the top 50 companies in all EU countries. But more
Therefore, more research into executive team demography in-depth investigation is needed beyond the statistics, and
would bring this issue to light, addressing the issue of the more collaboration is needed among the researchers so that
pipeline. Key questions include: Are women executives there is transparency about board structures and governance
mobile across companies, e.g., to be part of the talent pool systems, methodologies, and sampling decisions. Taken
in Firm A, but selected to serve on the board of Firm B? together, future research should consider multiple levels
Websites such as theyrule.com facilitate the collection of of analysis – the individual, board, firm, and industry/
networking data. environment.
There is a continual call for research that “proves” the
added value of women on corporate boards to the bottom CONCLUSION
line. However, we caution that it is unreasonable to expect
one female director to bring about a financial contribution The goal of this paper was to review the most up-to-date and
soon after appointment. Researchers could concentrate on significant studies of women on corporate boards. We have

identified what is known about how WOCB influences cor- diverse opinions and network ties. The third category, support
porate governance and firm performance. We argue that this specialists, offer expertise in particular areas such as financial or
occurs through multi-level processes, as shown in Figure 2. legal realms. Community influentials often come from politics,
The evidence shows that gender diversity on corporate clergy or academia and offer an understanding and linkage to
this community.
boards contributes to more effective corporate governance
6. The terms “Non-Executive Director” and “Outside Director”
through a variety of board processes, some of which do not refer to individuals on the board who do not have executive
show up as a direct influence on the firm’s bottom line, as roles in the firm. The terms “Executive Director” and “Inside
well as through individual interactions. As well as gover- Director” describe firm employees who have roles on the board.
nance outcomes, women directors contribute to important
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Tajfel, H. and Turner, J. C. (1986) The social identity theory of Planck Institute of Economics in Jena, Germany. She has
intergroup behavior. In: Worchel, S. and Austin, W. G. (eds.) published widely in top journals and has co-authored the
Psychology of Intergroup Relations, 7–24. Nelson-Hall, Chicago, IL.
textbook Strategic Management: Logic and Action. She is on the
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gender and performance issues of concern to directors: correlates board of Silicon Capital and is a member of the Global Entre-
of institution? Journal of Organizational Behavior, 20: 459–74. preneurship Monitor (GEM), the world’s largest compara-
Terjesen, S. and Singh, V. (2008) Female presence on corporate tive study of entrepreneurial activity. Siri earned her Ph.D. at
boards: A multi-country study of environmental context, Journal Cranfield and her Masters at the Norwegian School of Eco-
of Business Ethics, 83(1): 55–63. nomics and Business Administration (NHH).
Terjesen, S., Freeman, C. and Vinnicombe, S. (2007) Attracting Gen-
eration Y applicants: Organizational attributes, likelihood to Ruth Sealy is a Senior Research Fellow and Deputy Centre
apply, and sex differences, Career Development International, 12(6): Director at the International Center for Women Leaders at
504–22. the Cranfield School of Management where she earned her
Tharenou, P., Latimer, S. and Conroy, D. (1994) How to make it to Ph.D. She lectures on MBA and MSc courses and is
the top? An examination of influences on women’s and men’s co-author of the annual Female FTSE Report, the UK’s
managerial advancement, Academy of Management Journal, 37:
census on women on boards on UK listed companies. She is
899–931.
The Age (2008) Clearing the Reykjavikage, October 10. on the editorial board of Gender in Management: An Interna-
Thomas, A. (2001) Women at the top in British retailing: A longitu- tional Journal. A business psychologist, Ruth is also a man-
dinal analysis, Service Industries Journal, 21(3): 1–12. agement development consultant. In a previous career she
Thornton, E. (2008) Where Was Lehman’s Board? Business Week set up, ran, and sold a small company in the travel industry
Online. (http://www.businessweek.com/investing/insights/ with offices in London and the French Alps.
blog/archives/2008/09/where_was_lehma.html).
Westphal, J. D. and Milton, L. P. (2000) How experience and Val Singh is a Visiting Fellow and Consultant Researcher at
network ties affect the influence of demographic minorities the International Center for Women Leaders at the Cranfield
on corporate boards, Administrative Science Quarterly, 45: 366–98. School of Management where she earned her Ph.D. in Orga-
Westphal, J. D. and Stern, I. (2006) The other pathway to the board- nizational Behavior following a career as a manager in uni-
room: Interpersonal influence behavior as a substitute for elite versity administration. She is co-initiator of the annual
credentials and majority status in obtaining board appointments,
Administrative Science Quarterly, 51: 169–204.
“Female FTSE Index.” She has just completed a major study
Westphal, J. D. and Zajac, E. (1995) Who shall govern? CEO/board of gendered boardroom cultures in UK organizations. For-
power, demographic similarity, and new director selection, merly Gender Editor of the Journal of Business Ethics, she is
Administrative Science Quarterly, 40(1): 60–83. Associate Editor of Gender, Work, and Organization, and has
Wikipedia (2008) Dina Merrill. (http://en.wikipedia.org/wiki/ published widely. She speaks regularly on women directors,
Dina_Merrill). Accessed October 11. careers, and diversity on boards at international conferences.

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320

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

Women Directors on Corporate Boards:

Manuscript Type: Review

© 2009 Blackwell Publishing Ltd

Theory Characteristics Impact

Individual Human Capital Demographics Tokens and minority members

© 2009 Blackwell Publishing Ltd Volume 17 Number 3 May 2009

Volume 17 Number 3 May 2009 © 2009 Blackwell Publishing Ltd

© 2009 Blackwell Publishing Ltd Volume 17 Number 3 May 2009

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© 2009 Blackwell Publishing Ltd Volume 17 Number 3 May 2009

Board tions of leadership effectiveness, giving evidence of the need

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Volume 17 Number 3 May 2009 © 2009 Blackwell Publishing Ltd

Board their presence makes the board more sensitive to women’s

© 2009 Blackwell Publishing Ltd Volume 17 Number 3 May 2009

Volume 17 Number 3 May 2009 © 2009 Blackwell Publishing Ltd

© 2009 Blackwell Publishing Ltd Volume 17 Number 3 May 2009

FIGURE 2 possibilities of progress for women. Firm and environment

Volume 17 Number 3 May 2009 © 2009 Blackwell Publishing Ltd

© 2009 Blackwell Publishing Ltd Volume 17 Number 3 May 2009

Volume 17 Number 3 May 2009 © 2009 Blackwell Publishing Ltd

© 2009 Blackwell Publishing Ltd Volume 17 Number 3 May 2009

Volume 17 Number 3 May 2009 © 2009 Blackwell Publishing Ltd

© 2009 Blackwell Publishing Ltd Volume 17 Number 3 May 2009

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