Using Innovative Strategies to Unpack Female Contributions on Corporate Boards

Abstract

Female participation in corporate governance has grown slowly, yet steadily, with the majority of firms now having at least one female on their boards. In this way, female board members represent symbols of a changing society. One reason for the slower growth of female directors is the lack of clarity regarding how women make contributions on the board and under what conditions. Using data spanning 16 years and a total of 20,424 firm/year observations, this study investigates the relationship between women on a firm’s board and the firm’s pursuit of innovative strategies. Results indicate that female directors are more than symbols of change; female presence brings actual change, contributing to aspects of firm strategy concerned with acquisition, allocation, and deployment of key assets and resources. Further, results suggest that this female contribution strengthens when women have higher influence on the board via their board tenure or voting power.