Women on Boards Quotas, Targets, and Their Unintended Effects: Evidence From the United Kingdom

Abstract

This study aims to increase the understanding of the unintended effects of state-sponsored initiatives for gender equality and the role of corporations in helping contribute to a more egalitarian society. State-interventions for women on corporate boards (WOB) are often used to address the pervasive gender disparities that have historically and systematically prevented women from achieving those positions. Yet, their unintended consequences are rarely explored. Exploiting a natural experiment created by the United Kingdom’s soft law for WOB, I gathered a dataset of 3541 firm-year observations, to test the effects of the soft law on the probability of appointing more women directors after reaching the compliance threshold. Results demonstrated that although, at an aggregate level, women director’s numbers doubled, at the compliance threshold, the probability of appointing women to FTSE 350 boards discontinuously decreased by 41%. This suggests that while the soft law helped shatter glass ceilings, it built a barrier around the minimum targets. Implications for theory and practice are discussed.