Women in Politics: The Effect on Board Diversity
48 Pages Posted: 16 Dec 2020
Date Written: December 8, 2020
In this paper we examine if gender issues highlighted in visible political races change gender biased social norms and impact subsequent women representation on corporate boards. Viable women candidates in US Senate, House and Gubernatorial elections significantly impact women board representation. Firms in districts that experience an increase in viable female candidates are associated with a significant increase in the growth of women directors that is increasing in the visibility of the female candidate. The gains in women corporate leadership are broader and extend to more board committees, a higher likelihood of being a top five executive and increase in relative compensation. Analysis around 2016 presidential election between Hillary Clinton and Donald Trump, an event that generated strong gender undertones and resulted in a surprise win substantiates the results. The surprise win for Donald Trump is associated with a significant subsequent drop in the growth of women directors on boards of firms headquartered in counties where Trump won. The results highlight that changes in the attitudes towards women leadership arising from women’s success in the political sphere are important in bringing about change in women corporate leadership.
Keywords: Women Politicians, Corporate Boards, Board Gender Diversity, 2016 Presidential Election
JEL Classification: G30, G34, P16
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