A new study by Seema Pissaris, a clinical professor of international business at Florida International University in Miami, finds that that 87 percent of S&P 500 firms in 2017 had at least one female director, up from 65 percent in 2002. However, the median number of women on boards increased from one in 2002 to two in 2017 while men remained consistent at eight members. In 2017, 6 percent of female directors occupied board chair positions.
Professor Pissaris’ research showed that female directors are more than symbols of change. The presence of women on boards of directors brings actual change, contributing to aspects of firm strategy concerned with acquisition, allocation, and deployment of key assets and resources. “They contribute novel strategies by reconfiguring the firm’s assets and resources in unique ways such as through advertising intensity, research and development pathways, or financial leverage design,” Dr. Pissaris says.
Professor Pissaris also found that women have more influence on the board when they own more shares or have longer tenures, allowing them the clout needed to change the status quo in a firm’s approach to competition. “That’s where differences show up,” she said. “Power isn’t exercised by simply being a board member – it’s exercised through contributing to decisions and influencing other board members to go in a particular strategic direction.”
Dr. Pissaris that if companies are sincerely invested in having more female board members, they need to formalize this commitment as a company goal; set a timeline for its achievement; increase the female candidate pool by standardizing the desired skillsets; and collaborate with external consultants or advocacy groups who can tap into appropriate female candidates. “The progress is very slow,” she said. “We’re in 2021 and still having this gender conversation. It’s going to be a long time before we have parity.”
Dr. Pissaris is a graduate of Ryerson University in Toronto. She holds an MBA and a Ph.D. in business administration from Florida Atlantic University.
The full study, “Using Innovative Strategies to Unpack Female Contributions on Corporate Boards,” was published in the Journal of Business Diversity. It may be accessed here.