Many organizations all over the world have often been faced with the challenge of addressing the issue of gender diversity in relation to top jobs allocation (Brammer et al 2009). Despite frequent calls by the stakeholders to embrace the diversity, the achievement has been notably mean. In the study covered in this article, Hillman et al (2007) attempted to unravel the mystery as to what factors influenced women presence in the top team management or rather corporate boards of organizations. In the preamble of the study, the researcher’s literature review incorporates knowledge of scores of scholars who had had their shot in related research. One of the most interesting note was that despite women consisting of 37 % of the managerial workforce (US department of labour: bureau of labour statistics) just a mere 14.7 percent were in the top management based on the findings of a study carried out by catalyst on 500 fortune organizations. The researchers admitted previous studies had not provided the answer as to why some organizations had women representatives in their boardrooms while others did not have.
The question has always arisen regarding the purpose of having women appointed to the corporate boards. The idea of having women appointed to the corporate boards is vague and unacceptable (catalyst 1995). Women who are appointed to the top management teams however have proved to have a similar mission with the male counterparts, far a way gender representation. The ability of women to perform and produce favorable results in top management positions has however been questioned by men directors. As noted by Brammer et al (2009) the effectiveness of women in the corporate board is only significant when such women are accorded a working line near the ultimate end user.
In the study, the researchers made a great use of resources dependence theory. According to Daum (1999) there is a significant relationship between the firm’s specific resources and the need for women directors. For instance, an organization that has most of its workers in key areas being women will most likely have at least one woman in the top team management. The research described in this article therefore borrows so much for there resources dependence theory more so in the development of the hypotheses (hypothesis 2). It also enumerated the functions of the top management team and how important it is to the organization. Specifically the review had identified three key benefits that accrued to the firm from bond linkage. These were counsel and linkage, legitimacy and a reliable channel of communicating information and accessing information outside the organization (Dalton et al 1999). Furthermore, the review identified previous knowledge on the benefits a firm gets with females of their board. According to the information obtained, women were better able to achieve the benefits of the board linkage more effectively than men in most cases. Whether this is a fallacy or not is subject to the scholars cited.
The review identified four basic factors that were suspected to have a direct link with women representation in corporate boards. The four factors that were subject to the study were the organization’s size, industry nature, the diversification strategy and the network effects. The study therefore had four objectives. These were one, to identify the relationship between, the organization size and female representation in the top team management. Also, the study sought the link between the nature of the industry and female representation in the board. In addition, it sought to identify whether the network effects had any influence on such representation. The last objective was to identify whether there is a relationship between the organizations diversification strategy and the female representation in the board. In order to achieve these objectives, the study set four hypotheses based on the objectives of which were positive.
In the study, sampling and samples were used as the methodology. At first, a sample of 1000 publicly traded companies had reported the highest sales between 1900 and 2003 in America. Public fillings such as 10ks, annual reports and public statements were then used to gather information. Firms which were not publicly traded for at least five continuous years between 1990 and 2003 were removed from the sample.50 such companies were removed from the original sample. Therefore, 950 such companies formed the study’s final sample. The study established the first variable; female board representation which was measured against the four factors identified. Identification of the candidate’s gender was taken via four steps. The national survey on women on board of directors was reviewed. The press report on female executives and board members was also consulted. In addition, gender specific names were strictly looked into, to make sure that the candidate was indeed a woman. Also goggling was done to those names where confusion arose as to whether the candidate was a woman. The organization size was measured as a logarithm of sales while the industry labour force was obtained from the bureau labor statistics to identify the percentage of female workers in each two digit SIG industry category. The palepu’s (1985) entropy was used as a measure of diversification. The network effect hypothesis was measured relative to the outside female directors link as a total number of female directors to whom a focal firm was linked through the outside director. All the above measures coupled with the various controls employed by the study improved the authenticity of the research and its results. The data obtained was analyzed using statistical tools (measures of central tendencies) among them mean, standard deviations and correlation factors. This presentation, having been clearly represented in tables, was easy to study, understand and make conclusions.
According to the findings of the study, 44% of the firms studied had no female representation in the top management team or the board while the remaining 55.71% had one or more. It was also found out that, larger organizations were more likely to succumb to the pressure of the society and legitimacy to embrace diversity hence the hypothesis tested positive. Firms operating in industry with more women workers had a greater number of female representation in the board compared with the case where the vice versa was true. The study also found out that there was a great positive relationship between the firm linkage and the female representation in the board. In fact, it is evidenced that an increase of one female representative in an organization increases the possibility of a linked firm having at least one female in the top management by about 9%. However, no result showed any significant relationship between the diversity of an organization and female representation in the board. As such, the hypothesis tested negative.
The findings of this research set a very important precedent and generated important knowledge which will definitely be useful in solving the mystery of gender diversity in the boardrooms among organizations. It also builds on the existing knowledge on this issue and thus another step towards achieving gender sensitive representation. The general organization on the study was ideally sufficient to effectively answer the study questions. However, the study was not full exhaustive and more needed to be done to fully solve the problem. The notable limitation of the study is that it uses a very large sample and hence could hardly study it exhaustively. In addition, it had to deal with companies’ insider information which may be hard to get.
Brammer et al, (2009) Reputation and Women on the Board: British Journal of Management, Vol. 20, No. 1, pp. 17-29. Web.
Catalyst (1995), The CEO View Women on Corporate Board, catalyst New York.
Daum J (1999) Why CEO Have Tough Tomes Recruiting Women Director Spencer Stuart Board Index 1998, New York.
Hillman et al (2007). Organizational predictors of women on corporate boards. Academy of Management Journal, 50 (4): 941-952.
U.S Department of Labor, Bureau of Labor Statistics, (1998) Employment and Earnings No. 98.2 Washington DC