Universal Forms of Influence: Support for Women on Boards

Abstract

It makes little business sense not to have greater female representation in positions of power. Studies over many years indicate that companies benefit in several ways by having a gender diverse board. A diverse board may signal flexibility, creative thought, and open-mindedness, among other benefits, including the potential to reduce groupthink.

Many countries in Europe were quick to act on such information and mandated female representation on corporate boards many years ago. In the United States, progress has been historically left to companies. Although some companies have embraced gender diversity, the numbers are not close to parity.

To attempt to address this issue, there are various efforts underway in the U.S. to increase gender diversity on boards, including legislation in California, a recent SEC-approved comply or explain rule for companies listed on the Nasdaq stock exchange, and efforts by institutional investors such as State Street and BlackRock, recognizing the value diversity brings to corporate decision-making. Although some of these efforts are being contested in the courts, many companies have begun to comply with these initiatives.

Yet, it is not enough to have a seat at the table if one’s voice is not heard. This research proposes that the seven universal forms of influence proposed by social psychologist Robert Cialdini—authority, reciprocity, consensus, social proof, liking, scarcity, and unity— may provide helpful strategies for women to amplify their voices and impact policy. We provide an example in the highly successful efforts of the late Honorable Ruth Bader Ginsburg (“RBG”), who, at the beginning of her legal career, effectively utilized many of these strategies in arguing one of the earliest successful sex discrimination cases, Moritz v. Commissioner of Internal Revenue, at a time when women’s legal rights and roles in society were quite limited. RBG’s advocacy in this and other cases opened the gates toward reducing gender discrimination. The universal forms of influence are relevant to anyone who wants to change the beliefs and behaviors of others. They may prove to be effective in giving voice to those whose voices have historically been muted in corporate governance.

Keywords: women in leadership; corporate governance; gender discrimination; boards of directors

JEL Classification: J71, J78, K22, K31, K30, K20