Affirmative action programs and network benefits in the number of board positions.

Abstract

Whereas governments are increasingly considering affirmative action programs to increase corporate board diversity, the effect of such programs can be superficial as they do not address the underlying problem, which is women's access to and inclusion in relevant corporate networks. To address this issue, we study the relationship among affirmative action programs (binding gender quotas and non-binding gender targets), director networks, and the number of board positions individual directors hold given their gender. We use personal, professional, and network characteristics of 25,127 unique directors from 2,435 public firms in 32 European countries over the period of 2000 through 2017. We find that in the absence of affirmative action programs, women directors benefit less from their networks than men directors suggesting the existence of a gender gap in network benefits. After the passage of binding gender quotas, this gender gap in network benefits narrows between women and men directors. Overall, this research suggests that binding gender quotas make director networks a more salient tool for hiring women and may help in leveling the playing field in the way these networks are used for achieving top management positions.