Beyond tokenism: How strategic leaders influence more meaningful gender diversity on boards of directors

• Author: Stav Fainshmidt,Cynthia E. Clark,Orhun Guldiken,William Q. Judge,Mark R. Mallon
• DOI: http://doi.org/10.1002/smj.3049
• Date: 01 December 2019
• Published date: 01 December 2019

RESEARCH ARTICLE

Beyond tokenism: How strategic leaders influence

more meaningful gender diversity on boards of

directors

Orhun Guldiken

1

| Mark R. Mallon

2

| Stav Fainshmidt

1

|

William Q. Judge

3

| Cynthia E. Clark

4

1

College of Business, Florida International

University, Miami, Florida

2

Love School of Business, Elon University,

Elon, North Carolina

3

Strome College of Business, Old

Dominion University, Norfolk, Virginia

4

Bentley University, Boston, Massachusetts

Correspondence

Orhun Guldiken, Mango 429, College of

Business, Florida International University,

Miami, FL 33199.

Email: oguldike@fiu.edu

Abstract

Research Summary:We employ an exploratory approach

to understand what differentiates boards that retain lim-

ited, potentially tokenistic, gender diversity (i.e., a single

female director), and boards that more genuinely diversify

their composition by appointing additional female direc-

tors. Previous studies have speculated that strategic leaders

responsible for board appointments may influence this

occurrence. Using longitudinal data on U.S. firms, we find

that more female top managers and having the sole female

director serve on the nominating committee increase the

likelihood of additional female director appointments.

Boards and nominating committees with younger mem-

bers amplify these effects, respectively. We use interviews

with board members and professional corporate gover-

nance consultants to discuss the probable causal mecha-

nisms that underpin these relationships, highlighting novel

theoretical insights related to gatekeeping and social

psychology.

Managerial Summary:We explore what compels firms to

appoint additional female directors after the first one, as

only one female director could be considered a token.

Using data on U.S. firms, we find that more female top

managers and having the sole female director serve on the

nominating committee make firms more likely to appoint

Orhun Guldiken and Mark R. Mallon contributed equally to this study.

Received: 25 July 2017 Revised: 27 April 2019 Accepted: 3 May 2019 Published on: 10 July 2019

DOI: 10.1002/smj.3049

2024 © 2019 John Wiley & Sons, Ltd. Strat. Mgmt J. 2019;40:2024–2046.wileyonlinelibrary.com/journal/smj

additional female directors. These likelihoods are highest

when younger directors make up the board at large and/or

nominating committee. Chief executive officers can be

change agents for gender diversity in their organizations

by hiring female top managers and pushing for better rep-

resentation of women on boards. Likewise, younger direc-

tors appear to enhance board gender diversity. These

findings can inform the director selection process.

KEYWORDS

board gender diversity, board of directors, director selection process,

nominating committee, top management teams

1|INTRODUCTION

Board gender diversity has been a topic of increasing interest to scholars, policy makers, organiza-

tions, and the media for decades (e.g., Kesner, 1988; Post & Byron, 2015; PwC Report, 2017; Rei-

ngold, 2016; Terjesen, Sealy, & Singh, 2009). In a recent survey of corporate directors in the United

States, gender diversity topped the list of what brings new ways of thinking into the boardroom

(PwC Report, 2017). Further, growing evidence suggests that board gender diversity is associated

with a number of desirable organizational outcomes, such as avoidance of securities fraud

(Cumming, Leung, & Rui, 2015), more vigilant monitoring of the top management team (TMT;

Adams & Ferreira, 2009), more ethical firm behavior (Nekhili & Gatfaoui, 2013), and higher

accounting-based performance and stock market returns (Abdullah, Ismail, & Nachum, 2016; Post &

Byron, 2015).

Many U.S. firms today have one female director (Catalyst, 2017), but progress toward greater

gender diversity has stalled (2020 Women on Boards, 2017). Having only one woman on the board

is problematic for at least two reasons. First, appointing the first female director to the board some-

times represents tokenism in response to strong institutional pressures instead of a sincere attempt to

increase diversity of thought within the boardroom (Konrad, Kramer, & Erkut, 2008). Notably, a

renowned board gender diversity expert was quoted in a recent media report as saying in regards to

one female director, “One is definitely not enough…One is a token”(Carpenter, 2018). Second,

studies have shown that many of the benefits of a more gender-diverse board are realized only when

female directors move beyond a single representative (Jia & Zhang, 2013; Torchia, Calabro, & Huse,

2011). Hence, an explanation of why some boards go beyond a potentially tokenistic single female

director can help firms achieve a more meaningful level of board gender diversity and thereby experi-

ence the concomitant outcomes.

Because regulatory bodies and stakeholders often focus on decrying “the lack of legitimacy of

homophilous (e.g., all-male) boards”(Perrault, 2015, p. 148), institutional pressures likely compel

firms to add the first female director (Konrad et al., 2008; Perrault, 2015). However, once these

institutional demands have been appeased, additional appointments provide diminishing

legitimacy gains. Indeed, the likelihood of appointing a female director to a vacant board seat

drops significantly when one female director is already on the board (Farrell & Hersch, 2005).

GULDIKEN ET AL.2025