New research indicates a decline in gender diversity on corporate boards following economic crises.
- The study was conducted by emlyon business school and Surrey Business School, focusing on the financial crises of 2008-2010.
- A significant reduction in female representation on boards was found post-crisis, affecting positions across all levels.
- Neither female leadership nor gender-specific policies, such as quotas, mitigated the observed decline.
- The findings underscore a shift in corporate priorities away from diversity during challenging economic periods.
In groundbreaking research conducted by emlyon business school and Surrey Business School, a significant decline in gender diversity on corporate boards was observed following major economic crises, particularly those experienced between 2008 and 2010. The investigation, led by Professor Shibashish Mukherjee and Sorin M.S. Krammer, analysed over 10,000 corporate boards across 21 countries using a ‘natural experiment’ approach. The study revealed a robust decline in female representation, irrespective of board positions, expertise, or firm performance.
A remarkable finding of the study is the impact on junior female executives, who were frequently removed from board positions, even those in specialised roles like Chief Financial Officers. This reduction occurred despite qualifications and the necessity of female leadership for corporate equality progression.
Professor Mukherjee noted, “In times of crises, firms are forced to prioritise saliency and legitimacy differently than in ‘normal’ times. In turn, this shifts corporate focus away from ‘softer’ issues such as gender diversity to navigating the crisis as robustly as possible.” This statement encapsulates the corporate shift towards operational stability over maintaining diversity initiatives during turbulent periods.
Investigating further, the research assessed whether factors like having female CEOs or implementing gender quotas could buffer against the downturn in gender diversity. The findings were stark: neither female leadership nor gender-specific affirmative policies effectively prevented the reduction in gender diversity on boards. Professor Mukherjee commented on these insights, highlighting that while female leadership might suggest a move towards equality, the reality during crises is often different as gender equality is deprioritised.
The researchers’ work has been duly published in the journal “The Leadership Quarterly,” providing a scholarly resource on the dynamics between economic disruptions and gender representation in corporate leadership. This research offers critical insights into how external economic pressures reshape internal corporate governance strategies, revealing the vulnerabilities of diversity agendas in crisis scenarios.
This study highlights that economic crises significantly hinder gender diversity efforts on corporate boards, despite existing diversity strategies.
