Closing the Gap: Corporate Boards add more Women when Interlocked with Diverse Peers

Abstract

Much of the recent progress in the gender diversification of corporate boards has been attributed to the efforts of institutional investors and regulators (Hatcher, 2020; Groves, 2019; Gertsberg et al., 2021). Their success may suggest boards need to be coerced into adding women directors. However, with this thesis, I sent evidence showing the trend has been uneven and clustered, and that progress may be better explained by social conformance to descriptive norms among interlocked firms, over and above the effect of institutional investors and governments. The research demonstrates strong, albeit observational, evidence that gender diversification is in part a social, adaptive, and self-organizing process, where directors observe the norm for gender diversity on interlocked boards and use this norm as a reference point when electing new directors.