Stepping up on gender board diversity
Gender diversity on supervisory boards is frequently debated by policy makers, media, society, corporations, with ten countries implementing board gender quotas and more than twenty countries developing recommendations for gender diversity in corporate governance codes. Indeed, a country’s level of gender equality is believed to drive gender diversity on supervisory boards as the same forces that increase e.g. female labor force participation - culture, preferences, and institutions - are expected to also lead to greater representation of women at higher echelons, including management and supervisory boards. The literature is characterized frequently by a logical leap in the literature: culture and norms shape women’s presence in the labor market, and the lack of female top managers is further constrained by low presence of women on supervisory boards’ nominating committees. To explore whether this leap has any leg to stand on veracity of this claim, we develop a comprehensive database covering 20 years of public (e.g., stock-listed) and private (e.g., non-listed) firms from a wide selection of advanced and emerging economies on the European continent. Our sample includes over 100 million person-year observations for supervisory and management board directors, and covers a substantial share of output and employment in the analyzed countries.
We describe country, sector, and time patterns of gender diversity for both management and supervisory boards, documenting stylized facts which were previously unknown in the corporate governance literature. In corporate Europe, there are no women on 70% of the management boards and roughly 60% of the supervisory boards. We revisit the research agenda on the barriers to board diversity, exploring whether more gender equal countries have more women on management and supervisory boards in both public and private firms. We find substantial differences between public and private firms, such that country-level characteristics can exhibit positive correlations with prevalence of women on boards for the former and negative for the latter. This is particularly important as country-level gender board diversity studies are less common than micro-level studies, and offers implications for institutional and resource dependency theories. Our third contribution is identifying important differences between management and supervisory boards even within the same group of firms. Fourth, we answer calls for more comparative corporate governance research with our multi-country study moves beyond the single-country studies that dominate the literature. Taken together, our findings also answer calls for replication and extension.