The influence of corporate elites on women on supervisory boards: Female directors’ inclusion in Germany

Although we can observe noticeable progress in gender diversity on corporate boards, these boards remain far from gender balanced. Our paper builds on social identity theory to examine the impact of corporate elites – men and women who sit on multiple corporate boards – on board diversity. We extend the main argument of social identity theory concerning favouritism based on homophily by suggesting that boards with men with multiple appointments are unwilling to include female board members to protect the monopoly value generated by their elite status. The empirical analysis, based on DAX 30 firms in the period of 2010-2015, shows that the presence of multi-board men is negatively associated with women’s participation, while the presence of multi-board women and other women on management boards is positively related to gender diversity on boards. Furthermore, robustness tests support and confirm our conclusion that multi- board men have a significant association with board diversity, even with small size (i.e., 1 or 2). Additionally, we find a significant effect arising from pressure related to the introduction of gender quotas in Germany, effective in 2016, indicating the effectiveness of gender quota policies for board gender diversity.