How Many Female Seats on a Board? Group Gender-Diversification, Power, Risk-Taking, and Financial Performance
62 Pages Posted: 17 Mar 2021 Last revised: 5 Apr 2021
Date Written: April 5, 2021
I show that different group/board structures affect the impact of gender diversity on collective risk-taking and financial performance. Specifically, using hand-collected data from over 12,000 minutes of the Emmy award-winning television game show, Cash Cab, I find that personal power/influence, not just numerical strength, determines whether gender tendencies manifest in small groups. Using U.S. corporate board and financial data spanning nearly 20 years, I perform a novel combination of external validity tests that provide strong support for my findings. Overall, my results appear to reconcile the mixed extant empirical evidence on the effect of gender diversity on corporate behavior and firm performance, boost an economic/business case for non-tokenistic board gender diversity and are instructive for the ongoing discussions on diversity, board gender-diversification in particular.
Keywords: boards, directors, gender diversity, economic case, business case, gender-diversification, tokenism, corporate behavior, power, influence, risk-taking, financial performance
JEL Classification: G18, G28, G30, G32, G33, G34, G35, G38
Suggested Citation: Suggested Citation