A Critical Mass of Women on the Board of Directors as Critical Influencers

Posted: 3 Aug 2013

See all articles by Seletha R. Butler

Seletha R. Butler

Georgia Institute of Technology - Scheller College of Business

Date Written: August 1, 2013

Abstract

We examine the role and influence of female directors in high risk strategic board decision-making by applying critical mass theory to mergers’ and acquisitions’ decisions of Fortune 100 corporations. Applying critical mass theory, we analyze whether behavioral differences manifest themselves in the decision-making of women directors when the board of directors consists of a certain percentage of women. We hypothesize that women, as a minority group of directors, engage in less discussion and debate on high risk strategic board decisions (and thus vote with the majority on such matters) in the absence of a critical mass of women directors. We conclude that the tipping point for critical mass is proportional at thirty percent, and having a critical mass of women on corporate boards of directors is generally important for women director discussions and debates in high risk strategic board decisions.

Keywords: Corporate Governance, Board of Directors, Critical Mass, Strategic Decision-making, Board Diversity, Gender

JEL Classification: G30, G34, G39

Suggested Citation

Butler, Seletha R., A Critical Mass of Women on the Board of Directors as Critical Influencers (August 1, 2013). Available at SSRN: https://ssrn.com/abstract=2304828

Seletha R. Butler (Contact Author)

Georgia Institute of Technology - Scheller College of Business ( email )

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