The effects of gender diversity in boards of directors on the number of female managers promoted

Abstract

PurposeThis study elaborates on the process through which gender-diverse boards of directors increase representation of females in management positions. This study draws on the gender spillover effect to examine whether gender diversity on boards of directors significantly influences the number of women promoted to managerial positions. The authors also employ implicit quota theory to examine the interaction effects of female board directors and their related strategies to target female customers as a source of female talent on the promotion numbers of female managers.Design/methodology/approachThe authors draw from female manager panel data surveyed and gathered by the Korean Women Development Institute (KWDI), a Korean government-sponsored research institution, for the period 2008–2014. The total sample, comprising 5 biannual waves, includes 906 Korean companies across four wage rates. The authors apply zero-inflated negative binomial regression analyses to examine the effects of gender diversity on board director positions and its interactions with strategies targeting female markets on the number of female managerial promotions.FindingsThe authors find that gender diversity on boards of directors is positively related to the number of female managers promoted. Furthermore, in corporations where gender is not relevant to firms' strategy and decision-making, broader gender diversity increases the number of female managers promoted at lower- but not higher-level positions.Originality/valueThe current study demonstrates the complex role of gender diversity in board director positions in initiating and promoting the career development of female managers. On the one hand, gender diversity in board director positions has spillover effects on women's representation in management positions. On the other hand, female board directors impede the career progress of senior female managers to maintain their status in quotas when the female market is not critical to firms' competitiveness. Therefore, it is crucial to integrate two different concepts about gender diversity—the gender spillover effect and implicit quota theory—that elaborate on the effects of gender diversity in board director positions on female manager promotion numbers.