Published on: May 7, 2025 at 6:55 pm
Research shows that companies with more female directors can have better firm performance—and this is especially the case in countries that have stronger shareholder protections or that have greater gender equality. In addition, organizations whose boards have more female directors tend to be more engaged in activities that are central to boards’ responsibilities: monitoring and strategy involvement.
Academy of Management Scholar Kris Byron of Georgia State University said that board monitoring refers to the extent to which boards engage in activities that entail oversight of the firm and seek to control managers. Board strategy involvement refers to the extent to which boards engage in activities related to their advising role and decide how firms should compete in the marketplace.
Byron and research colleague Corinne Post of Villanova published an article on this topic in Academy of Management Journal.
“What we found was that there was a positive effect of adding women to the board on strategic involvement and a positive impact on board monitoring, but that board diversity is neither wholly detrimental nor wholly beneficial to firm financial performance,” Byron said. “There is some research showing that when you have more women on your board, they’re more likely to influence fellow directors’ or trustees’ behavior and that the norms of the board changes, for example, attendance gets better.
“There’s this spillover effect that women might have; maybe they come onto the board and they’re more diligent,” she said. “In some ways, that makes sense, because there aren’t tons of women who are in those kinds of senior positions, and so, if she got to that position, then she is probably quite exceptional and especially conscientious.
“Those behaviors may spill over to her male counterparts on the board, and there is research suggesting that that’s something that probably occurs.”
