| Effects of Gender-Based Faultline Strength in Corporate Boards: An Optimal Distinctiveness Theory Approach |
Received:October 15, 2017 Revised:October 15, 2017 |
Key Words: gender, board of directors, upper echelons theory, environmental dynamism, demographic faultlines |
| Author Name | Affiliation | | JIE WU* | University of Macau | | XINHE XINHE0 | University of Macau | | Orlando Richard0 | University of Texas Dallas | | Maria Triana0 | University of Wisconsin |
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Abstract: |
| Research has not clearly uncovered the mechanisms through which women’s inclusion on the board of directors (BOD) affect an organization's performance. Because gender heterogeneity studied in isolation does not account for other relevant demographic dimensions, we adopt a more nuanced approach in studying gender faultline strength effects. Using panel data from Chinese boards of directors consisting of 1,367 publicly listed firms and 4,570 board observations (13,364 board members), we find that BOD gender faultline strength increases strategic change supporting notions of optimal distinctiveness theory. However, the positive relationship between BOD gender faultline strength and strategic change is significantly stronger in stable than dynamic environments. We also find support for a moderated mediation model where BOD gender faultline strength more positively impacts strategic change, which ultimately improves performance (i.e., Tobin’s q), when the firm competes in a stable environment rather than a dynamic environment. How demographic faultline theory might have implications for the growing number of women within the upper echelons are offered. |
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