Does Board Gender Diversity Reduce Workplace Sexual Harassment?
54 Pages Posted: 17 Sep 2020 Last revised: 29 Jun 2021
Date Written: June 28, 2021
We add to the debate regarding the merits of board gender diversity by considering its impact on the incidence of workplace sexual harassment (SH), possibly the most important remaining barrier to gender equality. We investigate whether board gender diversity contributes to a reduction in workplace sexual harassment, or whether firms engage in “fem-power washing”, that is, the successful, but false, use of gender-equality CSR policies for corporate branding, where the falseness of the claim originates from the lack of concrete actions implemented towards the proclaimed goal.
We estimate the incidence rate of SH through textual analysis of employees’ job reviews published online during the period 2011-2017. We find that firms with gender-diverse boards experience less SH: An increase of one female director is associated with a 20.71% decrease in SH. Firms with high board gender diversity do not engage in fem-power washing, but rather synchronize the reduction in SH with improved social policies. The positive social externalities associated with female directors also extend to others forms of female leadership: we find that firms led by female CEOs and firms with higher percentage of female executives also experience decreases in SH.
Lastly, our results are robust to several adjustments for endogeneity concerns. We use the proportion of male directors at the focal firm that participate in other boards with female directors as our instrument in instrumented regressions. We also use propensity score matching. Our results hold with all these techniques.
Keywords: sexual harassment, board of directors, gender diversity, female CEO, environmental, social, and governance (ESG) policies
JEL Classification: G30, J16, M14
Suggested Citation: Suggested Citation