Literature Review Women on boards and in TMTS and firm performance24 may analyze own actions and decisions quickly and thoroughly and thus anticipate reactions of the external environment such as public criticism Heffernan 2002 Furthermore Lucas Pérez et al 2015 identify a substitution effect running in two directions Gen der diversity on the board may improve monitoring by compensating for lacking board characteristics that enhance board effectiveness for example in creased independency due to a high share of exter nal directors separation of CEO role and Chairman role instead of duality one person holding both positions simultaneously a medium board size between five and 15 members and a high number of compensation committee meetings synony mous with board functioning The effect also runs in the opposite direction firms with duality of CEO and Chairman roles and a low number of external or independent directors have a higher share of women on their board of directors Lucas Pérez et al 2015 Matsa and Miller 2011 show that female repre sentation on corporate boards does affect the gen der composition of top management Controlling for timing they find that changes in board com position precede a greater share of female execu tives Further controlling for a full set of firm fixed effects the relation is still significant Moreover an increase in female board members appears to have a positive impact on women s share of top execu tives total compensation overproportional to their number of positions as well as on the likelihood of having a female among the top five executives or even as CEO They point out that the long term impact of their results may be much larger than short term effects illustrating the following feed back cycle increasing the share of women on cor porate boards can lead to a subsequent increase in the ratio of women in management positions A rise in the number of female managers expands the pool of potential female board members which in turn may lead to greater female board mem bership and as a consequence to further increases in female executives Statutory quotas for women on boards of directors might thus lead to general spillovers in management Female representation on board is also associated with a reputational effect Brammer et al 2009 The reputational effect varies significantly across industries suggesting that the presence of women on corporate boards is assessed favorably only in sectors with close proximity to final customers interestingly the correlation corresponds to the relation between customer proximity of a sector and the probability of having female directors The authors interpretation of this finding is that reputational assessors adopt a rather narrow view of the relevance of women on boards and potential resources that they may provide to the board That is increased board independency due to female representation or the mentoring role for other wo men within the firm appear not to be relevant for the assessment The potential positive effects of increased female representation on boards are opposed by possible negative effects suggested by studies from vari ous lines of research As the board turns from a homogeneous into a heterogeneous group when female directors join it is likely that cohesion is reduced and the probability of conflict increases e j Hambrick et al 1996 Tajfel Turner 1986 Communication and exchange of information could be impeded decision making processes could be come more complex more time consuming and less effective due to conflicting opinions Campbell Minguez Vera 2010 If there is only one woman or a small minority of women on the board these women could be Women on boards and in TMTs and firm performance

Vorschau DIRK-Forschungsreihe Band 21 Workforce diversity and personal policies Seite 24
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