New research shows that supply constraints – a limited pool of women candidates on the radar for corporate director appointments – are affecting how American companies are responding to the pressures to achieve gender balance on their boards.

In December 2019, the World Economic Forum stated that it would take another two centuries to close the gender gap in the workplace in terms of wages, senior leadership and labour force participation. Several European countries have instituted mandatory board gender quotas in the last decade to address the gap. 

In the United States, which did not have any gender quota policy until as recently as September 2018 when California passed a board gender quota law, public pressure for board gender balance has also picked up in the last decade. Many states are now poised to adopt California-style board gender quota laws to accelerate the process further.

The success of such policies is likely to depend crucially on the underlying reasons for board gender imbalance – specifically, on whether qualified women are systematically passed over for board appointments due to biases that work against women, or because there is a limited pool of women in the radar for board nomination committees.

The authors of the new study show that a short supply of qualified women executives is limiting the efforts to appoint more women directors. Gender-balancing the board when there is a limited ready supply of qualified women directors is costly for companies, even for the largest ones.

The large companies avoid search costs by increasingly hiring women from the existing pool of experienced women directors. The smaller companies, less attractive to experienced directors, face a much greater challenge to recruit women as candidates. Unable to compete for the experienced women members and faced with high search costs of finding new candidates, smaller firms appointed 35% fewer women directors in the last decade compared with larger firms. 

The surge in demand for women directors has also led to the emergence of busy women directors – the average number of women directors holding three concurrent directorships increased by 94% in the 2009-2018 period. Women directors with one directorship were much more likely (relative to comparable male directors) to find the second position in this period, often in a company larger than the first.

At a time when shareholders are increasingly conscious that busy directors are detrimental to the quality of corporate governance, this study highlights an unintended, and perhaps undesirable consequence, of the increased pressure of recruiting women directors.

The authors highlight that the constrained supply of potential women directors is a significant challenge for widespread adoption of the California-style of board gender quotas across the United States. It is likely to increase the search-cost pressure on smaller firms, and busy women directors in larger firms.

It is therefore not apparent that requiring boards to meet gender quota targets is the best or the only way to overcome the biases within organisations that seem to drive board gender imbalance. Public policies, especially those that enable women to manage work and family more easily, appear at least as necessary.


‘Demand and Supply Side Determinants of Board Gender Imbalance’ by Patricia Boyallian, Sudipto Dasgupta and Swarnodeep Homroy



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