EconPapers    
Economics at your fingertips  
 

The Carrot or the Stick: Self-Regulation for Gender-Diverse Boards via Codes of Good Governance

Heike Mensi-Klarbach (), Stephan Leixnering () and Michael Schiffinger ()
Additional contact information
Heike Mensi-Klarbach: WU Vienna University of Economics and Business
Stephan Leixnering: WU Vienna University of Economics and Business
Michael Schiffinger: WU Vienna University of Economics and Business

Journal of Business Ethics, 2021, vol. 170, issue 3, No 9, 577-593

Abstract: Abstract Scholars have emphasized the potential of self-regulation, realized through ‘codes of good governance’, to improve gender diversity on boards. Yet, unconvinced of the effectiveness of this self-regulation, many regulators have implemented mandatory quota laws. Our study sheds light on this dilemma. Seeking to broaden our conceptual knowledge of how such ‘codes’ work in the specific case of gender diversity on boards, we ask: Under which conditions is self-regulation via voluntary principles of good governance effective? Expanding recent institutional-theory perspectives from the literature of women on boards, we show that, in the case of Austria, self-regulation via code recommendations is ineffective unless supported by additional forces. The primary reason for this, we argue, is that nominators do not expect benefits from gender-diverse boards. Furthermore, non-compliant companies face little pressure to change due to the small number of companies that have already adopted respective code recommendations. We identify two potential alternatives to boost the effectiveness of voluntary self-regulation for gender-diverse boards: First, the introduction of concrete targets for female representation and the public monitoring of fulfillment; and, second, the establishment of a credible threat that mandatory quotas will be imposed if diversity goals are not achieved. Drawing on longitudinal data from 2006 to 2016 on listed and state-owned companies in Austria, we give an empirical account of the conditions that assure effective self-regulation. Arguing that codes suffer from what we call ‘opportunity bias’, we conclude that political goals (such as gender equality) based on ethical rather than instrumental considerations are unlikely to be effectively implemented solely by codes of good governance.

Keywords: Women on boards; Gender diversity; Codes of good governance; Self-regulation; Institutional theory (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-019-04336-z Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:170:y:2021:i:3:d:10.1007_s10551-019-04336-z

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-019-04336-z

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-19
Handle: RePEc:kap:jbuset:v:170:y:2021:i:3:d:10.1007_s10551-019-04336-z