Gender and Corporate Crime : Do Women on the Board of Directors Reduce Corporate Bad Behavior?

42 Pages Posted: 28 Mar 2022

See all articles by Ruthy Lowenstein Lowenstein lazar

Ruthy Lowenstein Lowenstein lazar

Haim Striks Faculty of Law, College of Management

Ido Baum

Haim Striks Faculty of Law - College of Management

Dalit Gafni

College of Management (Israel)

Date Written: February 28, 2022

Abstract

The public debate on mandating gender representation on boards of directors in the United States is close to a boiling point. California introduced a mandatory quota in 2018 and the Nasdaq Stock Market followed suit with new diversity rules in 2021 for all corporations listed on the exchange. While the public discourse focuses on corporate performance, not much is known about the link between gender diversity and corporate normative obedience.
This study innovates by exploring the relationship between boardroom gender representation and corporate compliance with the law. The study examines the impact of gender diversity on corporate obedience in a sample of 660 public corporations. We find that gender diversity has a substantial positive impact on corporate compliance. Notably, every one percent increase in female representation on the board is associated with at least a four percent decrease in the probability that the corporation will be associated with a violation of the law.
The key contributions of this Article to the existing literature are threefold: First, the findings of this Article call for a re-evaluation of gendered theories of female white-collar offending on the basis of empirical data. Second, the Article adds a unique perspective to the broad discussion of environmental, social, and governance (ESG) aspects of corporate purpose. Third, the Article sheds innovative light on the discussion about corporate social responsibility (CSR) and the means to reduce negative externalities produced by corporations.

Keywords: corporate governance, boards, gender, diversity, NASDAQ, quotas, corporate wrongdoing, female offending, white collar crime, feminist criminology

Suggested Citation

Lowenstein Lazar, Ruthy and Baum, Ido and Gafni, Dalit, Gender and Corporate Crime : Do Women on the Board of Directors Reduce Corporate Bad Behavior? (February 28, 2022). Michigan Journal of Gender & Law, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4045490

Ruthy Lowenstein Lazar (Contact Author)

Haim Striks Faculty of Law, College of Management ( email )

7 Yitzhak Rabin Blvd.
P.O. Box 25072
Rishon LeZion, 75190
Israel

Ido Baum

Haim Striks Faculty of Law - College of Management ( email )

7 Rabin Blvd.
Rishon Lezion
Tel Aviv, 75190
Israel

Dalit Gafni

College of Management (Israel) ( email )

7 Yitzhak Rabin Boulevard
P. O. Box 9141
Rishon LeZion, 75190
Israel

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