Board dynamics and board tasks empowered by women on boards: evidence from Italy

Abstract

Purpose This study aims to examine the effects of board dynamics produced by reaching a certain proportion of women on board tasks (monitoring, strategy and advisory). Design/methodology/approach Using a panel of 35 listed companies belonging to FTSE-MIB index, for the years 2008–2015, the hypotheses can be tested by applying random effect regressions. The introduction of gender board quota law in Italy has created a quasi-natural experiment that is applied in the study. Findings This research provides evidence that reaching 33% women on boards, which is the threshold mandated by the Italian gender board quota law, makes a difference for strategy tasks but not for monitoring tasks. This proportion of women on boards creates the board dynamics necessary to empower all board members, allowing the varied knowledge, skills, backgrounds and personal qualities to be leveraged and used in strategy tasks. For monitoring tasks, obtaining a proportion of 20% women on boards, as a first threshold enforced by the law, is enough to voice their opinion during board meetings and challenge management. Originality/value The results show that each set of board tasks requires different dynamics trigged by a specific proportion between a minority (women) and a dominant subgroup (men). To enhance monitoring tasks performance, it is enough to reach a proportion between men and women which makes the women less isolated and more inclined to speak up during the board meetings. In the case of strategy tasks, the improved performance is achieved when the dominant group enticed to hear women’s opinions and responsive to various perspectives. This paper expands the debates going beyond monitoring tasks, showing the importance of board dynamics for engagement in strategy and advisory tasks.

Women on boards and corporate environmental performance in Italian companies: The importance of nomination background

“…The results, presented in Table 12, are compatible with our argument: they show that a turning point exists. The sign of the coefficient of the variable “PERCENTAGE OF WOMEN SQUARED” is negative, documenting a non‐linear relationship between women on boards and environmental performance (Slomka‐Golebiowska et al, 2022).…”

Advisory or monitoring role in ESG scenario: Which women directors are more influential in the Italian context?

“…First, following critical mass theory, prior research has stressed the need for an increased number of women (Dobija et al, 2022; Slomka‐Golebiowska et al, 2022; Torchia et al, 2011) in boardrooms, suggesting that reaching a minimum critical number enhances the ability to pursue positive outcomes, particularly in terms of disclosure (Fernandez‐Feijoo et al, 2014). We thus test different minorities of women directors (one woman, two women and at least three women) to find the cut‐off point of critical mass for positively affecting firm ESG performance (De Masi et al, 2021).…”

“…The specific regulation in Italy—setting thresholds for the percentage of women on boards using a long year (2012)—makes the Italian context particularly interesting. In fact, Italy was one of the EU countries that introduced the gender board quota early on (Slomka‐Golebiowska et al, 2022). Starting from very low‐level female board representation, Italian public companies achieved one of the highest proportions of women on boards in Europe in 2015 (European Commission, 2018; Seierstad, 2016).…”

“…The specific regulation in Italy-setting thresholds for the percentage of women on boards using a long year (2012)-makes the Italian context particularly interesting. In fact, Italy was one of the EU countries that introduced the gender board quota early on (Slomka-Golebiowska et al, 2022).…”

Gender diversity on corporate boards: when raising the voice is not enough

“…Our study expands on Wiley and Monllor-Tormos (2018) and De Masi et al, (2021a), by focussing on the channel variables between women on boards and corporate governance. Our study is situated in this research stream as we add to the literature about the potential sets of board processes, and investigate board behaviour and dynamics (Machold and Farquhar, 2013;Nielsen andHuse, 2010a, 2010b;Slomka-Golebiowska et al, 2022). Moreover, we contribute to the discussion on how increasing the percentage of women on boards affects board activities.…”