Women on Boards and Performance Trade-offs in Social Enterprises: Insights from Microfinance

Moez Bennouri, Anastasia Cozarenco () and Samuel Anokye Nyarko
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Moez Bennouri: Montpellier Business School
Anastasia Cozarenco: Montpellier Business School and Centre for European Research in Microfinance (CERMi)
Samuel Anokye Nyarko: Montpellier Business School and CERMi

Journal of Business Ethics, 2024, vol. 190, issue 1, No 9, 165-198

Abstract: Abstract Social enterprises combine social and financial goals. Previous studies have theorized the existence of a dual objective and maintain that it can lead to conflicts and create trade-offs. While the literature on trade-offs is extensively developed, empirical evidence is lacking on how the intensity of trade-offs might vary among organizations. We fill the void by investigating the moderating effect of female directorship on the relationship between the social and financial goals of social enterprises. Using data on 1193 microfinance organizations (MFOs) from 108 countries between 2007 and 2019, we find that a high proportion of women in the boardroom attenuates social-financial trade-offs. Further, our results show that the mitigating effect of female directorship on social-financial trade-offs is more pronounced in nonprofit MFOs, in unsubsidized MFOs, in the period since the recent microcredit crisis, and in countries where women are more empowered in terms of access to higher education, leadership positions, and employment opportunities. We attribute our findings to the distinctive skills, competences, and experiences of women, including an ethical social orientation, as well as their transformational and relational leadership style. The findings are supported by predictions based on resource dependence and leadership style theories.

Keywords: Social enterprise; Microfinance organization; Ethical finance; Trade-offs; Female directors; Social outreach; Financial performance (search for similar items in EconPapers)
JEL-codes: G21 G23 L21 L31 O50 P36 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10551-023-05391-3

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