Recent research reveals how economic crises impact gender diversity in corporate boards.
- The study analyses board compositions before and after the 2008-2010 financial crisis.
- Findings indicate a significant decline in gender diversity post-crisis.
- Junior female executives were notably affected, even holding specialized roles.
- Female leadership or affirmative policies did not prevent diversity decline.
Recent research conducted by emlyon business school has shed light on the adverse effects economic crises have on gender diversity within corporate boards. The study, led by Professor Shibashish Mukherjee along with Sorin M.S. Krammer from Surrey Business School, focused on corporate board compositions around the 2008-2010 financial crisis period, revealing a marked decrease in gender diversity following the financial upheaval.
The research involved analysing over 10,000 corporate boards across 21 countries using a method termed a ‘natural experiment.’ This approach allowed for a comparative analysis of board diversity before and after the global financial crisis, unearthing a consistent decline in female representation irrespective of board positions, expertise, or company performance.
Particularly impacted were junior female executives, many of whom were removed from boards despite holding significant roles such as that of a CFO. Professor Mukherjee highlighted the shift in corporate focus during crises, where firms tend to prioritise saliency and legitimacy over ‘softer’ issues like gender diversity to navigate the tumultuous period as effectively as possible.
The inquiry also delved into whether female leadership, such as having a female CEO, or the implementation of gender-specific affirmative policies, such as board gender quotas, could mitigate the decline in diversity. However, the findings showed that these factors did not hinder companies from reducing gender diversity on boards.
Professor Mukherjee pointed out that while female leadership might suggest a move towards gender equality, the focus on such equality diminishes considerably during times of crisis, even under female leadership. This outcome emphasises the complex challenges women face in climbing the corporate ladder, as their representation on boards becomes significantly compromised during economic downturns.
The research underscores how economic crises lead to diminished gender diversity on corporate boards, defying efforts for gender equality.
