Critical mass theory and women directors’ contribution to board strategic tasks

Torchia, Mariateresa; Calabrò, Andrea; Huse, Morten; Brogi, Marina

doi:10.22495/cbv6i3art4

Cited by 30 publications

(21 citation statements)

References 52 publications

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“…In 2011, the Arab Gulf states were at the bottom of the list for board seats held by women, Kuwait (2.7 per cent), Oman (2.3 per cent), Bahrain (1 per cent), United Arab Emirates (0.8 per cent), Qatar (0.3 per cent) and Saudi Arabia (0.1 per cent) (Catalyst, 2011). Several previous studies (Bennouri et al, 2018;Ben-Amar et al, 2017;Joecks et al, 2013;Torchia et al, 2010;Konrad et al, 2008) suggest that the effect of female directorship on corporate performance and Impact of board gender diversity decision-making process is conditional on having a critical mass of female directors for their effect to become significant. Joecks et al (2013) find that a critical mass of about three females on the boards is associated with higher firm performance than completely male boards.…”

Section: Discussionmentioning

confidence: 99%

“…According to the Arab Gulf Board Directors Institute[5] reveals that women constitute less than 1 per cent of executive-committee and board directors in the Arab Gulf states, this percentage is among the lowest in the world. Several previous studies (Wiley and Monllor-Tormos, 2018;Bennouri et al, 2018;Ben-Amar et al, 2017;Joecks et al, 2013;Torchia et al, 2011;Torchia et al, 2010;Konrad et al, 2008) suggest that unless boards have a critical mass of three female directors, the effect of women on the firm performance and decision-making process is limited. When this critical mass is reached, the presence of female directors has a significant impact on corporate performance and decision-making process.…”

Section: Gm 347mentioning

confidence: 99%

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The impact of board gender diversity on corporate social responsibility in the Arab Gulf states

2019

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Purpose This study aims to examine the impact of board gender diversity on the level of corporate social responsibility (CSR) disclosure in the Arab Gulf states. Also, this research further aims to explore whether the impact of board gender diversity varies across the Arab Gulf states. Design/methodology/approach Ordinary least squares regression is used in this study to test the impact of board gender diversity on the level of CSR disclosure. Manual content analysis is used to evaluate the extent of CSR disclosure in annual reports, stand-alone CSR reports, sustainability reports and website sections to examine the relationship between the extent of CSR reporting and board gender diversity. This study uses the global reporting initiative (GRI) fourth version reporting guidelines to design and define the classifications of CSR reporting checklist. Findings The findings show that there is a statistically significant relationship between the number of female directors and the level of CSR disclosure. The results show that board gender diversity is positively associated with the level of CSR reporting in two countries, namely, Bahrain and Kuwait. Also, the findings reveal that there is a weak positive relationship between the presence of women on the boards and CSR reporting index in Oman, Qatar, Saudi Arabia and the UAE. Originality/value This study attempts to fill the gap in the literature, in that no similar study covers the Arab Gulf countries as one economic unit. The study is unique in that it focuses on oil-rich countries. This study is, to the best of this researcher’s knowledge, the first to explore the impact of women’s boards on the extent of CSR reporting, as well as investigating the possible variation of board gender diversity impact on the extent of CSR reporting in the Arabian Gulf region.

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Section: Discussionmentioning

confidence: 99%

Section: Gm 347mentioning

confidence: 99%

The impact of board gender diversity on corporate social responsibility in the Arab Gulf states

2019

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“…A third basis for the results resides in critical mass theory. Although that concept has been applied largely in the context of women on boards of directors (Torchia et al , 2010), it can be extended to any board member characteristic. In this case, while a lone physician, researcher or university professor may not be able to influence the board’s decisions to any great extent, a sufficient number of such directors may be able to encourage innovation leading to more patent filings.…”

Section: Discussionmentioning

confidence: 99%

Leveraging board talent for innovation strategy

Valenti

Horner

2020

JBS

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Purpose Human capital has been traditionally viewed in terms of how an individual’s investment in knowledge, skills and abilities can lead to higher pay or promotions. More recently, human capital has been regarded as a unit-level resource using the term “human capital resources” to consider the aggregate effects of human capital. The purpose of this paper is to examine the collective human capital present in a firm’s board of directors as a valuable resource leading to superior firm outcomes. Design/methodology/approach The study examined the effects on firm innovation of the scientific expertise of corporate directors, average board tenure and the presence of a firm’s founder on the board. Data from a sample of pharmaceutical firms were analyzed with the dependent variable, innovation, measured as patent applications and both individual and unit-level human capital measures of the predictor variables. Findings The results show that the presence of a founder-director is positively related to innovation and more pronounced when combined with the board’s scientific expertise. Board tenure shows a relationship to innovation and is more evident in combination with the board’s aggregate level of scientific expertise. The effect of directors’ scientific expertise is also greater when measured at the board level of scientific expertise. Research limitations/implications Future studies should examine these relationships within a broader context extending the research to other industries thereby incorporating wider variation in both the antecedents and measures of innovation. In addition, future studies might investigate a likely non-monotonic relationship of board tenure with strategic outcomes, recognizing the non-linear nature of effects of board tenure. Practical implications In addition to the theoretical and empirical implications, this research may also inform practicing managers charged with constituting their boards of directors and provide some guidance for the recruitment and retention of board members. The research may also assist top managers and investors in knowing when the presence of a founder on the board is useful and supportive of the firm’s strategic direction. Originality/value The study extends scholarly understanding of human capital theory beyond the top management team to boards of directors demonstrating the importance not only of directors’ individual capital but also how it combines with that of other directors. Moreover, it enhances understanding of board characteristics beyond the bounds of demographic characteristics to show that additional qualities affect firm strategy. This research also informs managers, boards and investors how boards might be more effectively constituted to impact firm strategy.

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“…There is much empirical evidence to suggest that there is no influence of one woman on corporate boards or ‘tokenism’ (Charness & Greezy, 2012) as in terms of Kanter (1977) it is a ‘skewed group’ where male members would control one or two ‘tokens’. Torchia et al (2010) contended that women must obtain a ‘critical mass’, which is ‘going from one or two women to at least three women for their voices to be heard’. Joecks et al (2013) also argued that a higher firm performance can be associated with a ‘critical mass’ of ‘about 30 per cent women in the board’.…”

Section: Discussionmentioning

confidence: 99%

Do Women Directors Impact Financial Outcomes? The Indian Evidence

Kumar

Nigam

Singh

2020

Indian Journal of Corporate Governance

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This article investigates the impact of women directors on financial outcomes—return and risk of Indian companies. It applies fixed and random effects Tobit regressions to examine the effect of female directors on financial outcomes (returns and risk) of the firm, controlling promoters’ shareholding, leverage, firm growth and age, board size and board meetings. The study does not find any support to agency and resource dependence theories because the proportion of women directors in most Indian boards is too small to make much impact. However, it has a moderating influence to reduce variations in accounting profits and stock returns. The investors reward also meeting the regulatory quota of woman member on the boards by higher market returns indicating a signalling effect. The study adds an understanding of quota induced women directors’ influence on the firm’s financial outcomes. However, the regulators should be cautious in mandating induction of women members on the boards as they might be inexperienced or lack the needed grounding to effectively influence board processes.

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Critical mass theory and women directors’ contribution to board strategic tasks

Cited by 30 publications

References 52 publications

The impact of board gender diversity on corporate social responsibility in the Arab Gulf states

The impact of board gender diversity on corporate social responsibility in the Arab Gulf states

Leveraging board talent for innovation strategy

Do Women Directors Impact Financial Outcomes? The Indian Evidence

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