Trickle‐down effect: The impact of female board members on executive gender diversity

• Author: Shruti R. Sardeshmukh,Jill A. Gould,Carol T. Kulik
• Published date: 01 July 2018
• DOI: http://doi.org/10.1002/hrm.21907
• Date: 01 July 2018

SPECIAL ISSUE ARTICLE

Trickle-down effect: The impact of female board members

on executive gender diversity

Jill A. Gould | Carol T. Kulik | Shruti R. Sardeshmukh

University of South Australia Business School,

Adelaide, Australia

Correspondence

Jill A. Gould, School of Management,

University of South Australia Business School,

GPO Box 2471, Adelaide SA 5001, Australia.

Email: gouja004@mymail.unisa.edu.au

Female representation at senior organizational levels lags well behind male representation. We

investigate whether there is a positive nonlinear relationship between female board representa-

tion and female executive representation: the trickle-down effect. We investigated 1,387 orga-

nizations listed on the Australian Securities Exchange between 2003 and 2012 and found the

hypothesized nonlinear trickle-down effect operating between board and executive levels. The

trickle-down effect was strongest after 1 year but still significant after 5 years. We investigated

two potential moderators of the effect: organization size and gender diversity recommenda-

tions. There was no moderating effect of organization size, but contrary to expectations, gen-

der diversity recommendations slowed the trickle-down effect. Our findings suggest that

organizations can address the paucity of women at senior organizational levels by starting at

the top. Specifically, organizations making multiple appointments of female board members

should expect improvements in female executive representation. However, the signaling and

advocacy opportunities afforded by female board appointments may be less potent in the con-

text of external interventions. Our findings contribute to the ongoing policy debate about the

value of regulatory interventions to increase female representation at senior organizational

levels and highlight the need for research on the unintended consequences of these interven-

tions across national contexts.

KEYWORDS

Australia, executives, trickle-down effect, women in management, women on boards

1|INTRODUCTION

Organizations struggle to achieve gender diversity at senior levels,

including on boards and in executive groups. Around the globe,

female board and executive representation falls well below that of

male representation; women hold only 19.2 and 16.8% of board posi-

tions and only 14.2 and 5.6% of executive roles in the U.S. Standard &

Poor's 500 and publicly listed European Union organizations, respec-

tively (Catalyst, 2012, 2013, 2016; Egon Zehnder, 2014).

Governments have reacted to this paucity of women at senior

levels by launching interventions such as legislative quotas. These

external interventions pressure organizations into addressing their

gender imbalance (Metz & Kulik, 2014). Quotas involve a target rep-

resentation, a deadline to achieve that target, and penalties for non-

compliance (Terjesen, Aguilera, & Lorenz, 2015). For example,

Norway introduced a legislative quota requiring listed organizations

to achieve 40% female board representation by 2008, and France

introduced a legislative quota requiring 40% female board represen-

tation by 2017. Sanctions for noncompliance include delisting in

Norway and nonpayment of director fees in France (Catalyst, 2014).

Other countries, including Iceland, Italy, Belgium, Israel, Spain,

Finland, and Kenya, have introduced legislated quotas for female

board representation in listed organizations (Terjesen et al., 2015).

Legislative quotas have been described as “motors of change”

(European Commission, 2012, p. 1) and appear to be working, with

Norway having achieved a female representation of approximately

42% on the boards of listed organizations (Terjesen et al., 2015).

However, when quotas were first introduced in Norway, private-

sector managers, politicians, and the media were quick to openly

voice their opposition, including assertions that quotas would ruin

the Norwegian economy (Huse & Seierstad, 2013; Seierstad, 2016).

Norway is now seen as a success story, with women appointed to

DOI: 10.1002/hrm.21907

Hum Resour Manage. 2018;57:931–945. wileyonlinelibrary.com/journal/hrm © 2018 Wiley Periodicals, Inc. 931