CEO power and gender diversity in corporate boards: evidence from European companies

Adnene Sghaier

Studies in Economics and Finance, 2025, vol. 42, issue 4, 671-692

Abstract: Purpose - This study aims to examine the impact of CEO power and regulatory frameworks, particularly gender quotas, on board gender diversity. It explores how CEO power interacts with regulations to influence women’s representation on boards and assesses the role of female CEOs in this context. Design/methodology/approach - This study uses a quantitative research approach, analyzing data from 2003 to 2023. It uses ordinary least squares regression and entropy balance to evaluate relationships between CEO power, regulatory stringency and board gender diversity. Instrumental variables and the two-step generalized method of moments are used to address endogeneity and ensure the robustness of the results. Findings - The power of the CEO significantly enhances the diversity of board genders. Female CEOs also contribute to this, reinforcing the role model effect. While regulatory gender quotas boost diversity, they may result in “tokenism” once targets are reached. The synergy of CEO power and regulatory frameworks maximizes diversity, with female CEOs being most effective when supported by both quotas and CEO influence. Practical implications - This study emphasizes the importance of powerful CEOs in promoting gender diversity, particularly when working in tandem with strong regulatory frameworks. It suggests that organizations take advantage of CEO influence and regulatory support to exceed quota compliance and foster a genuine diversity culture. Female leadership plays a key role in improving board diversity. Originality/value - This research uniquely demonstrates the combined effect of CEO power and regulatory frameworks on board diversity, highlighting the critical role of female CEOs. It offers new insights into how organizational and regulatory dynamics interact to advance gender equality in corporate governance.

Keywords: CEO power; Gender diversity; Gender quotas; Regulatory policies (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:sefpps:sef-10-2024-0723

DOI: 10.1108/SEF-10-2024-0723

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