Do women directors care about gender policy?

ABSTRACT:

The present research sheds light on one part of the broad topic of gender diversity within the Board of directors: the increased presence of female as part of the board and the application of gender policies. Many studies have been trying to analyze the different aspects of the diversity and the subsequent implication at firm performance, market and sustainability levels. This research contributes to the social identity theory (TAJFEL and TURNER, 1979) in analyzing the behavior of members who belong to the same group. The social identity theory helps to explain collective phenomena not at individual level but at group level. Within the board’s reality, members perceive that they belong to a group, they have more similarities with the other members of the same group and consequently they more likely assess the behavior of the in-group members as more positive than the out-group ones (SINGH and VINNICOMBE, 2004; ELSTAD and LADEGARD, 2012). In the present research, we focus on the minority subgroup of women who belong to the group of the board of directors in the Italian context. The number of women as part of the boards has been recently increased by regulations in several countries, particularly in the European countries like Italy which is the focus of this study. The Italian government promoted the Law 120/2011 which imposed the appointment of a certain percentage of women within both the Board of directors and the Board of Statutory auditors of the listed companies. From a methodology standpoint we employ a content analysis on corporate social responsibility reports, based on a study of ADAMS and HARTE (1999) to classify gender policies and to measure the level of implementation of gender policies. We classify the gender policies as gender formal commitment to identify the company’s engagement with the topics of gender equality, equal opportunity and human rights. The second classification, called gender initiatives, identifies programs, endowment and resources that the companies promote in favor to the women. In addition, we investigate the association between gender policies and the percentage of women in the board of directors. Results show that the percentage of women on the board of directors is positively associated with gender policies, specifically with gender formal commitment. We show that having a higher percentage of women as members of the same group influence the development of gender policies in favor to the group of women. Moreover, in contrast to another stream of research which relies on the critical mass theory, we show that in the Italian context, what makes the difference in the implementation of gender policy is the percentage of women on board and not the number of women (at least three) who belong to the same group. Findings show that women play an important role as managers of the board and as members of the same group, confirming the social identity theory in the field of corporate boards. Thus, our study has practical implication for both managers and policy makers who should consider the appointment of women not as an obligation imposed by regulations but as a value added to the company towards more sustainable decisions in terms of equality and opportunity for the minority groups.