LEAN IN: THE ANTECEDENTS AND CONSEQUENCES OF FEMALE DIRECTORS’ ATTAINMENT OF POWERFUL POSITIONS ON BOARDS By Jooyoung Kim A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of Business Administration – Strategic Management – Doctor of Philosophy 2022 ABSTRACT LEAN IN: THE ANTECEDENTS AND CONSEQUENCES OF FEMALE DIRECTORS’ ATTAINMENT OF POWERFUL POSITIONS ON BOARDS By Jooyoung Kim With the heightened societal demand for promoting egalitarian values in corporate boards, firms have devoted much effort to improving female board representation. However, recent insights have suggested that some progress made thus far may be the result of firms’ symbolic conformity to external pressure, which alludes to the possibility that female directors’ low influence and lack of integration on boards may still persist. In this dissertation, I aim to develop and test theoretical arguments of what determines and follows female directors’ attainment of power and influence, as reflected in their assignment to major committee member or chair positions. First, I propose that female directors are at a relative disadvantage in attaining major committee positions. Specifically, although directors in general can benefit from expertise cues to be assigned to committee positions, the benefits are less for females than males. This gap can be attenuated when females are similar to board members in terms of other demographic dimensions and when the board is demographically heterogeneous. Second, I develop predictions about how female representation on board committee positions can contribute to gender diversity on boards and firm performance. I propose that greater female representation on board committees has negative relationship with a female director’s likelihood of exit, and has positive relationship with female additions to the board and firm performance. Results were drawn from a sample of S&P 1,500 companies during 2009 to 2019 ACKNOWLEDGMENTS I would like to acknowledge the support and encouragement I have received during the process of bringing this dissertation into fruition. First and foremost, I would like to send my deepest thanks to my co-chairs, He Gao and Gerry McNamara. Thank you He for seeing potential in me and standing by me along my academic journey. To Gerry, I really appreciate your keen insights; this dissertation has benefited greatly from your input we had from various informal and formal conversations. I would also like to express my gratitude to my Dissertation Committee members, Russell Johnson and Quinetta Roberson Connally, for their feedback and patience throughout the dissertation process. I could envision many future research projects from the thought-provoking comments you have offered me in my defense. I am also deeply appreciative of people that I have spent time with throughout my doctoral studies at Michigan State University. Thank you Lingling Pan, Andrew Yu, Meng Chen, Stefan Maric, Henry Young, and Shuqi Li for helping me survive through the process; I will fondly remember the times I have spent with you all. I would also like to express my gratitude to Susan Polhamus and Andrea Bates for their personal and administrative support. I also appreciate the faculty of the Management department who have shown dedication and support for their students. Their guidance has shaped my identity as a scholar. Finally, I would like to express my thanks to my family and friends for their consistent support. To my Mom and Dad, you have taught me a love of learning and the power of persistence. To Hun-whee Lee, you have given me the strength and inspiration to go on. Irene Choe, Daniela Trujillo Rodriguez, Min-ji Lee, So-yeon Um, Tiberiu Ungureanu, Jason Choo and iii my sister Eun-ji Kim, I thank you all for your friendship and love you offered in your own way. iv TABLE OF CONTENTS LIST OF TABLES ........................................................................................................................ vii LIST OF FIGURES ..................................................................................................................... viii INTRODUCTION .......................................................................................................................... 1 LITERATURE REVIEW ............................................................................................................... 9 Female board representation ....................................................................................................... 9 Antecedents ............................................................................................................................. 9 Outcomes ............................................................................................................................... 11 Summary ................................................................................................................................... 14 Gaps in the literature.............................................................................................................. 15 Female representation on board committees ............................................................................. 15 Antecedents ........................................................................................................................... 15 Outcomes ............................................................................................................................... 18 Summary ................................................................................................................................... 19 Gaps in the literature.............................................................................................................. 19 THEORY AND HYPOTHESES .................................................................................................. 21 A director’s expertise cues as sources of power ....................................................................... 21 A director’s gender and committee assignment ........................................................................ 24 Boards’ demographic configurations as contextual factors: A director’s demographic similarity ................................................................................................................................................... 31 Boards’ demographic configurations as contextual factors: Boards’ demographic heterogeneity ................................................................................................................................................... 34 Consequences of female representation in board committee positions..................................... 37 Impact of female representation in board committee positions on the promotion of gender diversity on boards .................................................................................................................... 38 Impact of female representation in board committee positions on firm performance .............. 43 METHODS ................................................................................................................................... 47 Sample and Data Collection ...................................................................................................... 47 Dependent variables .................................................................................................................. 48 Committee appointment ........................................................................................................ 48 Committee chair appointment ............................................................................................... 48 Director exit ........................................................................................................................... 48 Addition of female directors .................................................................................................. 49 Firm performance .................................................................................................................. 49 Independent variables ................................................................................................................ 49 A director’s expertise cues .................................................................................................... 49 Female representation in board committee memberships ..................................................... 51 Female representation in board committee chair positions ................................................... 51 v Moderator variables................................................................................................................... 51 Director gender ...................................................................................................................... 51 A director’s demographic similarity with other members ..................................................... 51 Demographic heterogeneity on boards .................................................................................. 52 Control variables ....................................................................................................................... 53 Analytical models ...................................................................................................................... 56 RESULTS ..................................................................................................................................... 58 Supplemental analyses .............................................................................................................. 69 Gender diversity index........................................................................................................... 70 Power differences among the four committees ..................................................................... 71 The effect of individual expertise cue indices ....................................................................... 71 DISCUSSION ............................................................................................................................... 79 Contribution to theory and research .......................................................................................... 80 Limitations and future research directions ................................................................................ 83 CONCLUSION ............................................................................................................................. 88 REFERENCES ............................................................................................................................. 89 vi LIST OF TABLES Table 1. Descriptive statistics and correlations for analyses on director’s likelihood of serving committee membership and chair positions .................................................................................. 60 Table 2. GEE regression results on the committee member and chair appointments................... 61 Table 3. Descriptive statistics and correlations for analysis on director exit................................ 64 Table 4. Cox proportional hazard model results for director exit. ................................................ 65 Table 5. Descriptive statistics and correlations for analyses on the addition of female directors and firm performance. ................................................................................................................... 66 Table 6. Fixed-effects logit regression results for addition of female directors. .......................... 67 Table 7. Fixed-effects regression results for firm performance .................................................... 69 Table 8. GEE regression results for individual expertise cue. ...................................................... 74 vii LIST OF FIGURES Figure 1. Proposed interactive effects of expertise cues x director gender .................................. 30 Figure 2. Proposed interactive effects of expertise cues x director gender x demographic similarity ....................................................................................................................................... 33 Figure 3. Proposed interactive effects of expertise cues x director gender x board demographic heterogeneity ................................................................................................................................. 36 Figure 4. The conceptual model of this dissertation ..................................................................... 46 Figure 5. Interaction plot of operational expertise and member appointment .............................. 76 Figure 6. Interaction plot of operational expertise and chair appointment ................................... 77 Figure 7. Interaction plot of board memberships and chair appointment ..................................... 78 viii INTRODUCTION In the past decade, the issue of underrepresentation of women on corporate boards has drawn significant attention from academic scholars, activists, and policymakers. Such interest from key stakeholders has worked as a strong driver for firms to add more women to boards (Hillman, Shropshire, & Cannella, 2007; Knippen, Shen, & Zhu 2019; Perrault, 2015). In Fortune 500 companies, the number of female directors reached 22.5% in 2018 compared to 16.6% in 2012 (Catalyst, 2012; 2020). Despite such increased numerical representation, it is unclear whether female directors—once appointed—have been able to be actively involved with various board matters as males. For example, people may view women as unduly benefitting from the external pressure for gender equality and thereby discount their expertise. Recent studies have shown that boards that add female directors to satisfy external pressures are likely to treat these directors as out-group members and deter them from holding powerful positions (Benton 2021; Knippen et al., 2019). This may hinder female directors’ active involvement with various board matters, which have been thought to be a crucial factor for effective board functioning and for the firm’s competitive advantage (e.g., Cumming, Leung, & Rui, 2015; Post & Byron, 2015; Roberson, Holmes, & Perry, 2017). Thus, above and beyond the female’s numerical representation, it is imperative to understand their social positions within boards. However, extant literature is largely focused on studying the causes and outcomes of numerical representation of females on boards (for a review of female board representation: Kirsch, 2018; Terjesen, Sealy, & Singh, 2009). We do not have complete understanding about what determines and follows female directors’ equal attainment of power on boards, as reflected in their assignments to major committee member or chair positions (i.e., audit, corporate governance, compensation, and nominating committees; for a review of board committees, see 1 Kolev, Wangrow, Barker III, & Schepker, 2019). Notably, the few management studies have demonstrated mixed findings concerning the presence of gender bias in terms of women’s assignment to major committee positions. Bilimoria and Piderit (1994) showed that females’ attainment of board committee member positions is lower than their male peers with similar experiences. In contrast, Peterson and Philpot (2007) suggested that there is little evidence of gender bias on boards; they found that women are more likely to be chosen for executive and finance committees than males when they have experiences of serving multiple boards and of working as leaders of non-business organizations (e.g., university administrator). Management studies also lack an understanding of the consequences of female directors’ assignments to major committee positions. Although several studies examined the role of female directors in specific committees (e.g., compensation: Bugeja, Matolcsy, & Spiropoulos, 2016; Cook, Ingersoll, & Glass, 2019; nominating: Guldiken, Mallon, Fainshmidt, Judge, & Clark, 2019; audit: Sun, Liu, & Lan, 2011), not much is known about how their collective representation in all major committee positions can impact important board- and firm-level outcomes. Overall, a more systematic examination is needed to expand our understanding about female directors’ attainment of power on boards. This dissertation aims to provide comprehensive understanding of female directors’ assignment to major committee member or chair positions by exploring its antecedents and outcomes. By drawing on status characteristics theory, social identity theory, and self- categorization theory, this dissertation addresses three research questions. The first question pertains to which directors are likely to be chosen for major committee member or chair positions and whether this criterion benefits female and male directors to the same extent. Drawing on status characteristics theory, I propose that directors with high expertise cues (e.g., 2 ties to prestigious institutions, Acharya & Pollock, 2013; multiple board appointments, He & Huang, 2011; board tenure, Acharya & Pollock, 2020; functional experience, Veltrop, Molleman, Hooghiemstra, & van Ees, 2017) are more likely to be assigned to major committee member or chair positions. Expertise cues are characterized as explicit individual characteristics that signal his/her expertise as a director. When a director has high expertise cues, others view that he/she will be able to make a significant contribution to the team (Wagner & Berger, 1997). Such an impression allows a high expertise cue director to offer advice to others (Bunderson, 2003a) and attain influential positions (Bunderson, 2003b), thereby offering a higher chance to attain power within the group. I also suggest that a director’s gender affects his/her likelihood of serving in major committee positions. Specifically, I argue that female directors are less likely to serve major committee positions than males do. Then, I expand my theory to examine whether a director’s gender differentially shapes the extent to which expertise cues affect the director’s committee assignments. I argue that expertise cues benefit both male and female directors in their assignments to major committee member or chair positions, yet female directors gain relatively less advantage from their expertise cues than the males. Indeed, status characteristics theory suggests that people judge other’s expertise by combining all the relevant and salient cues that signal their potential contributions to the team (Berger, Cohen, & Zelditch, 1972). These not only include cues that directly signal the target’s job-specific expertise (e.g., past director experience) but also the demographic attributes that signal the target’s general competence in a given context (e.g., gender) (Bunderson & Barton, 2011). Given a notion that female directors are chosen to fulfill stakeholder pressure for gender equality (Knippen et al., 2019; Mitra, Post, & Sauerwald, 2021; Solal & Snellman, 2019), females tend to receive lesser credit for their expertise cues (Joshi, 2014; Joshi, Son, & Roh, 2015). Moreover, it is noteworthy that the 3 majority of the boards consist of males who are likely to evaluate the expertise of other male members in a more favorable light (e.g., Huse & Solberg, 2006; Kogut, Colomer, & Belinky, 2014). Social identity and self-categorization theorists argue that people categorize themselves and others into in-/out-groups based on gender (e.g., Hogg & Terry, 2000). They view others with the same gender as in-group members and treat them more favorably and recognize their expertise better (McDonald & Westphal, 2013; Westphal & Zajac, 1996), because doing so allows them to self-enhance (Hewstone, Rubin, & Willis, 2002). All in all, although expertise cues benefit both female and male directors in attaining powerful positions, the extent of their benefit may appear differently for female versus male directors. The second research question this dissertation aims to address is when these gaps in the expertise recognitions of female and male directors may be attenuated. Specifically, I highlight the role of the board demographic configurations (i.e., a director’s demographic similarity with others and overall demographic heterogeneity of the board) in the expertise evaluations of female directors. Indeed, scholars have suggested that people in general view others who are demographically similar as in-groups and treat them favorably (e.g., Westphal & Zajac, 1995; Zhu, Shen, & Hillman, 2014). When a female director has a higher demographic similarity with other directors other than gender (e.g., age, race), she is more likely to be categorized as an in- group given her other overlapping demographic attributes. Hence, the female director is apt to have her expertise cues better recognized compared to cases when there is no such overlap (Dovidio, Gaertner, & Validzic, 1998). Moreover, the level of demographic heterogeneity on boards also shapes others’ expertise recognitions of female directors. When the board is highly heterogenous with different age and racial groups, gender becomes a less salient demographic category (Prati, Crisp, & Rubini, 2020). The distinction between in-/out-group based on gender 4 becomes blurry, and board members are less likely to refer to the director’s gender when they gauge her expertise cues. Consequently, I argue that, when there is (1) high demographic similarity between the female director and other members or (2) high demographic heterogeneity on the board, the positive effects of female directors’ expertise cues on their assignments to major committee member or chair positions will be strengthened. The third research question explores whether and how having higher number of female directors in major committee member or chair positions—henceforth termed female representation in major committee positions—matters at board- and firm-levels. First, I examine outcomes related to the further promotion of board gender diversity including female directors’ likelihood of exiting and the addition of female directors. Indeed, board gender diversity can sustain and expand organically when women are less likely to exit from and more likely enter boards (cf. Boone, Van Olffen, Van Witteloostuijn, & De Brabander, 2004). I theorize that female representation in major committee positions decreases the likelihood of incumbent female director exit. When there is a higher number of female directors holding these positions, female directors on boards in general are likely to receive better support and resources from these powerful female members. They can also develop a sense that women’s expertise is well- respected and valued, thereby encouraging them to remain on boards (Zhang & Qu, 2016). Furthermore, I propose that female representation in major committee positions influences the future addition of female directors on boards. Female directors in these positions are apt to be actively involved with various board decisions (Conyon & Peck, 1998; Triana, Miller, & Trzebiatowski, 2014). Throughout this process, they may reduce the negative beliefs about females in board interactions, thereby increasing the boards’ overall openness toward adding additional women (Wagner & Berger, 1997). They can also push for adding more female 5 directors themselves by recommending and endorsing potential female candidates. Thus, I propose that the number of female directors in powerful positions increases the subsequent likelihood of female additions to boards. Second, as a firm-level outcome, I suggest that higher female representation in major committee positions leads to higher firm performance. It has long been suggested that female directors have divergent viewpoints and values from males, and this can greatly improve the board effectiveness (e.g., Bonn, 2004; Campbell & Vera, 2010). Notably, such value can be realized when the female members can actively interact in board discussions (Post & Byron, 2015). Female directors in major committee positions are key players who can help create an environment that embraces divergent opinion and values; their official power as committee members not only allows them to feel psychologically safe to express divergent viewpoints, but also fosters a perception that diverse voices are welcomed on the board on the part of non- committee female directors (Chen, Peterson, Philips, Podolny, & Ridgeway, 2012). Consequently, the firm can benefit from fully leveraging the capabilities of its board members. This study makes several contributions. First, this dissertation extends research on the antecedents of gender representation on boards. Scholars in this domain revealed that external pressures have been key drivers of increasing the number of females in corporate leadership positions (e.g., Gregoric, Oxelheim, Randoy, & Thomsen, 2017; Knippen et al., 2019). However, this has inadvertently resulted in firms’ symbolical reactions, which has little to do with advancing the gender equality values as originally intended (Benton, 2021; Knippen et al., 2019). Therefore, it is imperative to understand which factors internal to boards can aid in organically promoting their gender equality values. To respond to this call, this dissertation focuses on female directors’ committee assignments, above and beyond their numerical representation on 6 boards, and theorize that having powerful women on boards can sustain and expand future female board representation. By doing so, this dissertation suggests females’ roles in “[serving] as active change agents in the upper echelons of organizations” (Duguid, Loyd, & Tolbert, 2012, p. 396). Second, this dissertation adds to corporate governance research by examining the effect of female representation in major committee positions on firm performance. Despite the considerable effort to study the influence of numerical representation of female directors on firm-level outcomes, the result has been widely mixed (e.g., Boivie, Bednar, Aguilera, & Andrus, 2016). Indeed, women’s numerical representation does not necessarily involve their impact on board decisions given their minority status in most boards. This paper offers an alternative pathway to explore the benefits associated with the presence of female on boards by examining how the level of power and influence that female directors hold in the boardroom affects firm performance. Female directors holding major committee positions can facilitate the active expression of divergent viewpoints during board interactions, thereby working as a key factor that recognizes the value that females bring to the boardroom. Third, this dissertation identifies board attributes (i.e., a director’s relational similarity with others and overall demographic heterogeneity of the board) as key contextual factors that can further explain the interactive effects of a director’s expertise cues and gender on his/her assignment to major committee positions. Indeed, prior work using status characteristics theory has focused on the notion that expertise recognition depends on observers’ perception and is subject to stereotypes (e.g., Joshi, 2014; Joshi & Knight, 2015; Jung, Vissa, & Pich, 2017). These studies have given relatively little attention to understanding various contextual factors affecting expertise recognition, with the exception of some early research (e.g., Wagner, Ford, & Ford, 7 1986). This study highlights the understudied but important roles of board demographic compositions in shaping expertise recognition among board members. 8 LITERATURE REVIEW With growing societal demands for gender equality in corporations, the female representation in the boardroom has garnered much attention from corporate governance scholars. I first provide a general review of the literature on the female representation on boards, specifically examining the antecedents and outcomes of their numerical representation. Research in this domain studied when and how boards add female directors (i.e., female director appointment events), as well as what determines the presence or the proportion of female directors on boards (henceforth termed female board representation) and its outcomes. Next, I review a subset of research on the female representation on board committees. 1 Board committees are subgroups of directors that address board issues within specialized areas such as corporate governance, nomination, audit, and compensation. Since directors assigned to major board committees are thought to hold power and influence (Boivie, Graffin, & Pollock, 2012; Kesner, 1988; Kolev et al., 2019), appointment of more females in committee positions is an indicator of the influence they have on board activities. Under each section, I provide summaries of findings and identify gaps to advance the current state of the literature. Female board representation Antecedents. Studies delving into the issue of what leads to the higher female board representation boards have examined various board-, firm-, and environmental characteristics as possible antecedents. Their general takeaway primarily centers on the role of stakeholder pressures in shaping the female board representation. For example, Hillman et al. (2007) and Knippen et al. (2019) found that firms that are larger, operate in industries with higher female employment bases, and have more links to other firms with female directors are more likely to 1 Given the relative lack of board committee research in management domain, I also included research published in finance journals. 9 have higher female board representation. Drawing on resource dependence logic, these papers suggested that the aforementioned characteristics are indicators of stakeholder pressures for appointing more female directors: first, larger firms are more visible to external stakeholders such as investors, customers, communities, who can publicly scrutinize firms for falling behind in gender equality. Second, firms in industries with higher proportion of female employees tend to face more pressures from the current and potential female employees to promote gender diversity. Third, firms linked with more peers with female directors are more likely to conform to the practice of hiring more female directors because—through interlocking directorates—they understand the value of gender diversity on boards and know better what is needed to adopt such practice. Mun and Jung (2018) investigated the role of foreign institutional ownership in increasing female board representation in Japanese firms. Foreign institutional ownership works as an external pressure for Japanese firms that have fallen behind in the global norm for gender diversity. Moreover, Kogut et al. (2014) drew implications for U.S. public policy in a simulation study using data from Norwegian firms that have been legally mandated to have at least 40% representation of females on boards. They suggested that the U.S. government enforce a gender quota of at least 10% to 20% females on boards to endogenously generate a critical mass of female directors in the long term. While stakeholder pressures prompt firms to include more females on boards, firms tend to appoint female directors to symbolically conform to the trend (Benton, 2021). Indeed, Farrell and Hersch (2005) found that female board representation is negatively related while incumbent female director exit is positively related to the addition of new female directors. From these findings, they suggested that firms do not consider female and male candidates equally for directorships. Knippen et al. (2019) supported this notion by examining the means through which 10 female directors are added to boards. They found that firms under high stakeholder pressure are more likely to increase female directors via the addition of board seats. Since these firms select new female directors based in part on gender, they are hesitant about having a new female replace an incumbent male director. In this case, they choose to accommodate the new female director by adding board seats. Despite the prevalent research focus on external pressures for gender equality on boards and firms’ subsequent reactions, several studies assessed firms’ internal efforts to include more female directors. These studies identified the roles of managers, top management teams (TMT), and peer directors. At the managerial level, Mun and Jung (2018) found that Japanese firms are more likely to have higher female board representation when managers of corporate social responsibility (CSR) or investor relations (IR) have more power. Indeed, these managers tend to pay attention to stakeholder demands for gender equality. At the TMT level, Guldiken et al. (2019) emphasized that a CEO’s valuing of gender equality—which is reflected in the number of females on TMT—increases the likelihood of female director appointments. At the board level, McDonald and Westphal (2013) showed that incumbent directors’ mentoring plays an important role in female first-time directors’ subsequent appointments to other boards. Furthermore, Guldiken et al. (2019) found that the presence of a female director on nominating committees increases the likelihood of subsequent female director appointments. Outcomes. Research in this domain has primarily focused on understanding whether female board numerical representation impacts various firm-level outcomes. In particular, the bulk of research on the topic has investigated its performance effects, although the results have been largely equivocal. Some studies revealed the positive relationship between female board representation and firm performance (e.g., Abdullah, Ismail, & Nachum, 2016; Campbell & 11 Minguez-Vera, 2008; Carter, Simkins, & Simpson, 2003). These studies emphasized the diverse skillsets and perspectives that female directors bring to the boardroom; having female directors enables boards to provide better advice, legitimacy, and resources to management. Furthermore, the divergent insights offered by the female directors facilitate comprehensive and effective decision-making processes on boards (cf. Simons, Pelled, & Smith, 1999). Early empirical evidence by Carter et al. (2003) found that female board representation has a positive association with the firm’s value (i.e., Tobin’s Q). Research using non-U.S. firm data also showed similar patterns. For example, Campbell and Minguez-Vera (2008) found that female board representation has a positive association with firm value (i.e., Tobin’s Q) using Spanish firm data. Also, Abdullah et al. (2016) found consistent positive results for ROA using Malaysian firm data. They suggested that female board representation can also be beneficial to firms in emerging market settings. It is also noteworthy that some papers theorized but did not find a significant positive relationship between female board representation and firm performance (e.g., Isidro & Sobral, 2015; Miller & Triana, 2009). Scholars have also presented evidence that the higher female board representation may negatively impact firm performance. They have argued that shareholders’ negative perceptions of higher levels of female board representation may ultimately impact a firm’s market value (i.e., Tobin’s Q). Such negative perceptions may be due to negative stereotypes about females holding elite corporate positions or to a perception that the firm might be prioritizing stakeholder interest over those of shareholders. Abdullah et al. (2016) and Solal and Snellman (2019) showed that female board representation is negatively associated with Tobin’s Q, although some papers did not find any relationship (e.g., Post & Byron, 2015; Rose, 2007). Such mixed results might be better understood by examining shareholders’ reactions to each director appointment. Farrell and 12 Hersch (2005) found insignificant market reaction (i.e., cumulative abnormal returns) to female director appointments. In contrast, Mitra et al. (2021) found that female directors receive less shareholder dissent (i.e., votes in director elections against a candidate). They suggested that shareholders reacted positively because they are also aware of the high stakeholder pressure for gender equality. Interestingly, such a pattern weakened and even reversed with agency-related threats (i.e., low performance, media controversies, low attendance rate, and the insider status of the director candidate). Lastly, one study discussed how female directors might have a detrimental impact on firm effectiveness. Adams and Ferreira (2009) showed a negative relationship between female board representation, Tobin’s Q, and ROA after accounting for endogeneity. They attributed such low performance to female directors’ tendency for tougher monitoring, which could have substantially limited managerial discretion. Such mixed findings may have derived from different sample selection criteria or the performance measures. A recent meta-analysis by Post and Byron (2015) attempted to draw a tentative conclusion by combining 144 independent samples. They found the beneficial impact of female board representation in terms of the accounting performance (i.e., return on assets, return on equity, employee productivity, and return on invested capital). Yet they did not find significant relationship for market performance (i.e., market-to-book ratio, Tobin’s Q, stock performance, and shareholder returns). In addition to looking at performance outcomes, some studies have examined whether and how female board representation influences various board- and firm-level decisions. In hypothesizing about these relationships, the research associated the presence of female directors with (1) better governance, (2) higher stakeholder orientation, and (3) less risk-taking. First, Adams and Ferreira (2009) found that female board representation has a positive relationship 13 with the proportion of performance-based pay in director compensation. They also found that in firms with higher female board representation, CEOs are more likely to exit when the firm performs poorly. These findings support the notion that female board representation is associated with better governance. In a similar vein, Cumming et al. (2015) found that higher female board representation is associated with less fraud in their analysis of Chinese firm data. Second, Bear, Rahman, and Post (2010) and Marquis and Lee (2013) showed that female board representation is positively associated with corporate social responsibility ratings and philanthropic contributions. These papers suggested that the presence of more female directors prompts the management to take a stakeholder orientation. Finally, Triana et al. (2014) and Chen, Crossland, and Huang (2016) found that firms with higher female board representation are less likely to undertake strategic change and acquisitions. Since gender-diverse teams are less dominated by groupthink or rapid consensus during their decision-making processes (cf. Simon et al., 1999), they are more likely to curtail overconfident and risky strategic decisions. Summary Several insights can be drawn from the review of the literature on the female board representation. First, scholars have identified stakeholder pressures as key drivers for including more females on boards. However, scholars have also found that firms’ symbolic actions to conform to this norm may deter a further increase of female board representation. Second, although a significant effort was given to revealing the relationship between female board numerical representation and firm performance, the findings are largely mixed. Scholars have found both positive and negative relationships, and such pattern particularly stands out for the effect of market performance than for the operating performance. Third, scholars have recently began to study how female board representation shape various corporate governance practices 14 and firm strategy, which are considered to be more proximal outcomes. Overall, findings suggest that female board representation is associated with higher monitoring and stakeholder (rather than shareholder) oriented firm strategy. Gaps in the literature. A few theoretical gaps can be identified, given the summaries outlined above. First, researchers need to explore more about which factors inside the firm help sustain and further expand the presence of females on boards. In particular, the current research lacks understanding of which board characteristics allow female directors to stay longer on boards and prompt boards to add female directors above and beyond the social norm. It is imperative to study board characteristics given that they shape interactions among board members and ultimately enable female directors to become in-group members. Second, scholars noted that the effects of the female board representation may become apparent when they can have a substantive influence over board decisions (e.g., Miller & Triana, 2009). Thus, considering how female directors represent power on boards may help scholars better understand the inconsistent findings on the relationship between female board representation and firm performance. I suggest examining the impact of female directors’ power on boards, instead of their simple numerical presence, on firm performance. The extent to which female directors hold power within a board can be proxied by capturing how much female directors represent major committee positions (e.g., Kolev et al., 2019). In the next section, I review the research on the female representation on board committees. Female representation on board committees Antecedents. The question of whether female directors can attain various board committee positions—either as members or as chairs—has long been studied by management and finance scholars. Studies have primarily examined the presence of gender bias within a 15 board by testing whether a female director, compared to a male director, is more or less likely to be assigned to the major board committees (e.g., Adams & Ferreira, 2009; Bilimoria & Piderit, 1994; Kesner, 1988; Peterson & Philpot, 2007).2 According to these studies, when female directors are less likely to be assigned to major committees than males—after controlling for professional experiences—it is possible to conclude a presence of gender bias on boards. However, the findings have largely been inconclusive. For example, Bilimoria and Piderit (1994) found that female directors are less favored for committee member positions than males, particularly for compensation, executive, and finance committees. Kesner (1988) and Peterson and Philpot (2007) provided evidence that a director’s gender does not determine whether the director attains committee memberships in general, although male directors are more likely to be appointed for some specific types of committees (e.g., executive committees). In contrast, Adams and Ferreira (2009) found a female advantage in committee assignments. They found that females are more likely to be appointed as a member of audit, corporate governance, and nominating committees. A subset of research has gone one step further to examine if gender moderates the degree to which a director’s experience influence the likelihood of committee membership assignments. Again, research has shown inconsistent results. Bilimoria and Piderit (1994) proposed that female directors benefit less from their board tenure, occupational background, and multiple board appointments than males in their assignments to board committee member positions. Peterson and Philpot (2007) did not find any evidence that directors’ experiences are evaluated differently by gender. They used directors’ occupational background (i.e., business experts, 2 The labels and inclusion criteria for the major board committees differ slightly among studies. For example, Kesner (1988) identifies four major committees: audit, nominating, compensation, and executive. Adams and Ferreira’s (2009) four major committees are audit, compensation, nominating, and corporate governance. 16 support specialists, community influentials, insiders; Hillman, Cannella, & Paetzold, 2000) as a proxy for director experience. It is worthwhile to note that the two studies differ not only in their operationalization of director experience but also in their use of the sampling time frame. While Bilimoria and Piderit (1994) used Fortune 500 companies’ 1984 data, Peterson and Philpot (2007) used Fortune 500 companies’ 2002 data. More recently, scholars have examined whether female directors’ experiences are evaluated differently with regard to their appointments to committee chair positions, which are key leadership positions within the committees. Overall, studies proposed that female directors’ experiences are discounted compared to those of male directors when they are assigned to committee chair positions. Field, Southern, and Yore (2020) found that female directors benefit less from their relevant committee experiences on other boards when they are appointed as a committee chair. Benton (2021) showed that female directors’ multiple board experiences are not as valued as those of males in their committee chair appointments. He suggested that this undervaluation may derive from a notion that female directors have attained multiple board positions from stakeholder pressures for gender equality. One recent study by Knippen et al. (2019) examined the specific means through which female directors are appointed to the focal board and their subsequent committee chair appointments. As noted in the previous section, boards tend to add female directors via the addition of board seats when they are under high stakeholder pressure for gender equality. However, such gendered practice negatively colors other directors’ viewpoints about the females’ competence, thereby reducing the likelihood of the female directors’ subsequent assignment to committee positions. Overall, Knippen et al.’s (2019) implications are similar to those of Benton (2021). Their findings collectively showed both the bright and dark side of stakeholder pressure for gender equality. Although stakeholder pressures can encourage firms to 17 add more female directors, it may also create doubts about female appointees’ true qualifications for a director job. In this case, female directors are less likely to be assigned to major board committee positions. Outcomes. Although less attention has been devoted to understanding what the female representation on board committees may entail, several studies have explored this question at a specific committee level. These studies investigated how female representation on a specific committee may impact the board’s decisions in the relevant domains, although their findings largely showed mixed relationships. For example, Sun et al. (2011) proposed that a higher proportion of female directors on the audit committee may curtail earnings management, thereby enhancing a firm’s earnings quality. However, their empirical findings showed an insignificant relationship. Two studies examined the assignment of female directors on the compensation committee and its outcomes. Bugeja et al. (2016) showed that the presence of one or more female directors on the compensation committee decreases CEO compensation levels. Similarly, Cook et al. (2019) studied how having female directors on the compensation committee may impact the gender pay gap within top management teams (TMT). They did not find a meaningful association between the proportion of females on compensation committees and the gender pay gap within the TMT. Yet they found that the gender pay gap within the TMT significantly decreases when the compensation committee chair is a female. Lastly, Guldiken et al. (2019) showed that having female in a nominating committee increases the likelihood of subsequent female director appointments. Although most research examined female directors’ role in a specific committee setting, one management study by Carter, D’Souza, Simkins, and Simpson (2010) investigated whether female representation on the major committees (i.e., audit, nominating, and compensation 18 committees) influences firm performance using S&P 500 firm data between 1998 and 2002. They did not find evidence that female representation on the major committees leads to higher Tobin’s Q or return on assets (ROA). Summary Although relatively less research has examined female directors’ assignment to committee positions, a few patterns arise from the extant findings. First, studies have been focused on understanding whether gender bias plays a role in directors’ assignments to major committee positions. Findings in general showed inconclusive patterns, although two recent studies revealed some consistent evidence that female directors are at a disadvantage in attaining committee chair positions. Second, research on the outcomes of female representation in committee positions is scant. Several studies in this domain have assessed the relationship in a specific committee setting, and their findings are largely mixed. Gaps in the literature. First, given that findings on the relationship between directors’ gender, experiences, and committee assignments are inconclusive, scholars may explore the contextual factors to obtain additional insights. Specifically, I propose to focus on demographic compositions of other board members, because they closely shape how an individual member builds relationships with others and is perceived by others on the team (e.g., Chattopadhyay, George, & Shulman, 2008; Zhu et al., 2014). Second, little is known about whether and how the number of females in all major committee positions (i.e., corporate governance, nominating, audit, and compensation) may impact various board- and firm-level outcomes. Directors on committees are likely to be influential members as they are delegated to carry out specialized work and are highly committed to the board (Boivie et al., 2012). Thus, having more females as key board members signifies 19 relative power held by female directors, which in turn may impact various board decisions. I believe examining this question can further inform the broader research on female board representation, which has only focused on examining the outcomes of a simple numerical presence of female directors. 20 THEORY AND HYPOTHESES A director’s expertise cues as sources of power Boards of directors play crucial roles in monitoring and advising management (Hillman & Dalziel, 2003), drawing on the skills, knowledge, and experience that directors have accumulated over the years. In particular, the level of expertise possessed by directors has been thought to be closely related to effective board functioning (Haynes & Hillman, 2010; Krause, Semadeni, & Withers, 2016; Oehmichen, Schrapp, & Wolff, 2017). Directors’ ample experience acquired across the multiplicity of companies and industries allows them to recognize problems and come up with feasible solutions more easily (Lungeanu & Zajac, 2019). Consequently, high- expertise individuals are more likely to be deemed valuable and exert substantial influence on various board matters (Lungeanu & Zajac, 2019). However, expertise resides within an individual and is not readily observable. Thus, according to status characteristics theory, people rely on observable characteristics to make indirect inferences about others’ competence3 in the work group—henceforth termed expertise cues (e.g., Berger et al., 1972; Ridgeway, 1991; Wagner & Berger, 1997). When a member displays expertise cues that are associated with superior task performance—such as a degree from an Ivy League institution or a much-valued career trajectory—other members believe that this member should be able to make a significant contribution to important group goals. Furthermore, group members use these criteria to rank one another’s competence and implicitly determine which members should be accorded more influence. In particular, members who are 3 Social psychologists have long posited that people make judgments of others based on two dimensions—warmth and competence (for a review, see Cuddy, Glick, & Beninger, 2011). This dissertation focuses on the competence dimension because the warmth dimension may be less relevant in my research context—that is, high-status groups. It has been suggested that members in high-status groups tend to evaluate themselves in terms of competence rather than warmth and view others in a similar light (e.g., Carrier, Louvet, Chauvin, & Rohmer, 2014; Fiske, Cuddy, Glick, & Xu, 2002; Oldmeadow & Fiske, 2010). Given that boards are high-status groups, it is likely that directors primarily rely on competence when evaluating other directors. 21 perceived to have higher levels of expertise are more likely to be encouraged to participate in group decisions and to have their advice and opinions valued, thereby exerting influence and power within the group (Berger & Zelditch, 1985; Bunderson, 2003a; Ibarra, 1993; Ridgeway, 1991). Previous studies have observed this pattern in various work group settings such as production teams (Bunderson, 2003b), business unit management teams (Bunderson, 2003a), and top management teams (Carpenter & Wade, 2002). Indeed, Acharya and Pollock (2020) noted that “status issues permeate social and organizational life (Fiske, 2010; Pearce, 2011), and status hierarchies are one of the most pervasive and fundamental features of social relations.” I propose that, as in any other work group, directors’ expertise cues play important roles in determining one’s status and power within the board. Scholars have noted that such a sociopsychological mechanism is highly relevant to a board setting because boards carry out highly complex decision making without being guided by formal rules or manuals (Acharya & Pollock, 2020; Forbes & Milliken, 1999; He & Huang, 2011). Moreover, since board members meet episodically and spend a relatively short time together, members have limited opportunity to observe one another’s expertise in any great detail (Veltrop et al., 2017). When a director possesses valued credentials in terms of their educational and professional background, other members believe that such a member can bring valuable resources to the focal board (cf. Benton, 2021; Garg, Li, & Shaw, 2018; He & Huang, 2011). As a result, the director is more likely to attain powerful and influential positions among the focal board members. A direct and formal means of signaling a director’s status and power on a board is his/her assignment to committee positions. Board committees are subsets of directors who handle specific areas of operation on behalf of the entire board. Among the different types of committees, four major ones are corporate governance, nominating, audit, and compensation 22 committees (Adams & Ferreira, 2009; Kolev et al., 2019). Directors who work as a member or as a chair of these key committees are thought to be the most active members of the board (Boivie et al., 2012; Masulis & Mobbs, 2014) and hold greater span of influence (Adams & Ferreira, 2009; Benton, 2021; Kesner, 1988; Zhu et al., 2014). I argue that directors serving on these four major committees hold greater power than other board members and top managers by drawing on Finkelstein’s (1992) four bases of power: structural, ownership, expert, and prestige power. Of the four bases, the ones that are particularly relevant to the board committee context are structural and expert power. 4 Directors hold structural power when they have formal authority over major board issues, which is closely tied to the very presence of four major committees to delegate the major responsibilities of the board (Gai, Cheng, & Wu, 2021; Kolev et al., 2019). For example, the audit committee oversees the firm’s financial reporting and disclosure practices, and the nominating committee is in charge of director selection processes. The compensation committee recommends and monitors executive compensation structures, and the corporate governance committee makes decisions on governance-related principles and procedures. Aside from their formal responsibilities, moreover, committee members’ close involvement with the board matter is another source of structural power. Committee members meet regularly and frequently even outside of the formal board meetings (Masulis & Mobbs, 2014), allowing them to exert greater influence over various board decisions. Indeed, research has provided ample evidence about the substantial impact of committees on various board- and firm-level outcomes such as firm performance (Aggarwal, 4 When discussing committee members’ bases of power, I excluded ownership and expert power. Ownership power signifies the extent to which a director can represent shareholders by owning a firm’s shares. It is less relevant with the committee context because memberships in four major committee positions are not necessarily associated with having higher equity ownership (cf. Kolev, Wangrow, Barker, Schepker, 2019). Prestige power represents a director’s ability to reduce the uncertainty from the external environment, which derives from the director’s previous affiliations with prestigious institutions. Given that prestige power is based on one’s personal traits, it has less relevance with the committee context. 23 Erel, Ferreira, & Matos, 2011), director selection (Guldiken et al., 2019), and the overall monitoring quality of the board (Faleye, Hoitash, & Hoitash, 2011). Directors have expert power when they possess the skill sets that help the firm solve critical issues at hand. Given that directors serving on these four major committees tend to invest more time and effort in working on various board matters, they are more likely to obtain firm- and domain-specific knowledge. Board members are more likely to view these directors as an expert and value their advice and opinions. Given the aforementioned roles of expertise cues in conferring power and influence to the focal director, I expect that a director with high-expertise cues is more likely to be appointed as a member or chair of major board committees. It is worthwhile to note that management scholars have used both the committee member and chair positions as proxies to measure a director’s power within a board (e.g., member: Adams & Ferreira, 2009; Billimoria & Piderit, 1994; Kesner, 1988; Knippen et al., 2019; chair: Benton, 2021; Field et al., 2020; Garg et al., 2018). However, it is also likely that members and chairs of the committees hold different levels of power. Chairs play leadership roles within the committees such as setting the key agenda and shaping the committee’s overall relations with the board, thereby holding higher power than their members (Kolev et al., 2019; Ghafran & Yasmin, 2017). Thus, I examine committee member and chair positions separately. Hypothesis 1: A director’s expertise cues will be positively associated with the director’s appointment to major board committees as a (a) member or (b) chair. A director’s gender and committee assignment Status characteristics theorists have suggested that people consider others’ demographic characteristics, aside from the expertise cues, when forming expectations about others’ competence (Bunderson & Barton, 2011; Wagner & Berger, 1997). Although demographic 24 characteristics may not always be directly related to an individual’s task-related competence, these characteristics, at a conscious or unconscious level, signal the target’s general ability for a given job. Thus, demographic characteristics work as indirect markers of a focal individual’s competence (e.g., “women are less likely to be assertive and thus less suitable for leadership positions”). Gender is one salient and enduring demographic characteristic that people often consider when assessing others’ expertise. People often form beliefs about women’s or men’s relative superiority in various work domains based on what they perceive as gender differences (e.g., Eagly & Karau, 2002; Ridgeway, 2001; Wagner & Berger, 1997). The general belief about females’ versus males’ relative superiority in a particular job depends on which gender characteristics are thought to fit better with the specific job context (Geis, Brown, Jennings, & Corrado-Taylor, 1984; Joshi, 2014; Joshi & Knight, 2015). Thus, it is imperative to understand, in a board setting, whether directors conclude that one gender is generally deemed more apt for a director position than the other. I expect that, in a board context, females are generally viewed as less apt for a directorship than males. Occupations associated with high prestige and wages are thought to be associated with masculine images (Cejka & Eagly, 1999; Glick, 1991; Glick, Wilk, & Perreault, 1995). Female have traditionally been thought to be a lesser fit for elite corporate positions (e.g., top management and director positions). This is because stereotypes associated with females (e.g., communal and sympathetic) are incongruent with “masculine” qualities (e.g., aggressive, competitive), which are regarded as necessary for elite corporate positions (Gupta, Han, Mortal, Silveri, & Turban, 2018; Jeong & Harrison, 2017; Koenig, Eagly, Mitchell, & Ristikari, 2011; Martell, Parker, Emrich, & Crawford, 1998). Supporting this notion, Eagly and Karau (2002) 25 noted that “the incongruity between [perceptions of] the female gender role and the leader roles is likely to be the most extreme at the highest levels of leadership” (p. 577). Following this logic, a female director is likely to be considered less competent than a male director. It is noteworthy that research based on double standards of competence view has suggested that females in elite corporate positions may be viewed as more competent than males (Foschi, 2000; Rosette & Tost, 2010). Researchers have argued that people are aware that gender bias exists, and thus they assume that females who have climbed up the corporate ladder despite the bias should be highly competent. However, such an argument can only hold when females show “compelling evidence” that they perform better than males in these positions (Rosette & Tost, 2010, p. 223). This is similar to the “burden of proof” process suggested by status characteristics theory (e.g., Wagner & Berger, 1997); when people generally believe males are more apt for a specific job than females, such a belief can be lessened or can disappear only when indisputable evidence proves that females can deliver a superior performance. Otherwise, the general beliefs will persist. I argue that it is unclear if the above assumption—that female directors have shown compelling evidence that they perform better than males—holds in the present study context. Indeed, recent corporate governance studies have provided evidence that general beliefs about females’ and males’ competence for directorship may yet persist; Mitra et al. (2021) and Solal and Snellman (2019) noted that shareholders tend to view the appointment of female directors as the firm’s pursuit of corporate social responsibility than of competitive advantage. Their conclusions reveal how society at large views female directors, which has implications for how board members might view their female colleagues. 26 Stated formally, I posit that, given the belief that male directors should be more apt for the directorship, it is likely that they seem more competent and are more likely to attain powerful positions of the board (i.e., the major board committee member or chair positions). Hypothesis 2: A director’s gender will be positively associated with the director’s appointment to major board committees as a (a) member or (b) chair, such that a likelihood of female directors’ serving committee positions is less than that of male. Interaction between expertise cues and demographic characteristics Status characteristics theorists have suggested that people combine different types of status information to form an overall expectation of others’ competence (e.g., Berger, Fisek, Norman, & Zelditch, 1977). Thus, people combine positive and negative aspects of expertise cues and demographic characteristics in inferring one another’s competence. In this dissertation, I examine interaction effects concerning situations where a female director with high expertise cues is viewed differently from a male director with high expertise cues in terms of their competence, which ultimately facilitates or impedes her attainment of power within the board. I expect that, in a board context, females tend to benefit less from their expertise cues in terms of the committee assignments given the negative information that their demographic characteristics signal to others. As noted earlier, females are inherently viewed as less apt for directorships than males and, therefore, in the eyes of other directors, have a lower general ability to successfully perform more powerful directorship. Even if a female director has a high levels of expertise cues, board members will generally view that her performance as a director should be lower than that of a male director. It is worthwhile to note that such a discount may not eliminate the effects of high expertise cues entirely; indeed, expertise cues work as a more proximal marker for competence than demographic characteristics. A female director with high 27 expertise cues will benefit from the possession of these cues but the extent of such a benefit will be lower than that of a male director with a similar level of expertise cues. Moreover, female directors’ expertise cues may be relatively discounted, given that boards primarily consist of males who are likely to evaluate other males’ expertise cues in a more favorable light. Indeed, social psychology research has suggested that people categorize members of the same gender as an in-group and favor them over the out-group because doing so allows them to maintain a positive self-view and to reduce subjective uncertainty (e.g., Hogg & Terry, 2000; Hornsey & Hogg, 2001; Tajfel, 1981). As a result, members of the same gender—as an in-group—are more likely to influence, interact with, and favorably evaluate one another (i.e., Green, Anderson, & Shivers, 1996; McDonald & Westphal, 2013; Rocha & Praag, 2017; Tsui & O’Reilly, 1989; Turban, Dougherty, & Lee, 2002). A similar notion is supported by several works based on status characteristics theory. These works suggested that observers might view the same expertise cues differently depending on the specific attributes of the observer and their mutual relationship with the target (Joshi, 2014; Joshi & Knight, 2015). A member’s expertise cues are likely to be viewed favorably in a team that consists primarily of members of the same gender (Joshi, 2014; Joshi et al., 2015). Putting the above arguments together, I propose that there is an interaction between a director’s expertise cue and gender regarding his or her committee appointments. Female members’ expertise cues serve as weaker implications for her competence as a director, given the persistent presence of gender stereotypes and the occurrence of homophily in male-dominant boards. These mechanisms together form the perception that a female director, despite the possession of high expertise cues, may be less competent than the male directors with the similar 28 profile, thus negatively affecting her ability to influence the board process. The proposed interactive effect is illustrated in Figure 1. Hypothesis 3: The positive relationship between the director’s expertise cues and his/her appointment to major board committees as a (a) member or (b) chair will be moderated by the director’s gender, such that the relationship will be stronger for male directors than female directors. 29 Figure 1. Proposed interactive effects of expertise cues x director gender 30 Boards’ demographic configurations as contextual factors: A director’s demographic similarity Although a question of whether female directors’ experience and skills are evaluated in a biased manner has drawn management scholars’ attention (e.g., Bilimoria & Piderit, 1994; Peterson & Philpot, 2007), little is known about which contextual factors may attenuate or amplify the above relationships. One type of contextual factor worthy of examination is the impact of boards’ consisting of other demographic characteristics such as race and age. Indeed, Crisp and Hewston (2007) noted, “We can be, and often are, identified and we identify others according to a combination of group memberships” (p. 163). As such, social psychology literature has long studied how people’s evaluation of others can be impacted by the presence and configurations of multiple demographic categories within teams (for a review, see Crisp & Hewstone, 2007; Prati et al., 2020). Drawing on these insights, I examine configurations of board members’ demographic characteristics other than gender (i.e., age, race) as key forces shaping board members’ evaluation of female members’ expertise cues (cf. Joshi & Roh, 2009). I first examine board members’ configurations across age and race dimensions in relation to the focal female director as a contextual factor that shapes how members value their female colleagues’ expertise cues. According to social psychology research, biased evaluations of minority members derive from an assumption that minority members should be different (Crisp & Hewston, 2007); thus, people evaluate minority members in a more positive manner when they find similarities with them in other dimensions (e.g., Crisp, Ensari, Hewstone, & Miller, 2003; Migdal, Hewston, & Mullen, 1998; Urban & Miller, 1998). Zhu et al. (2014) examined this notion in the board context. They found that, even if a director is different from others in terms of a few demographic characteristics and professional experiences, his/her higher 31 similarity in other remaining dimensions can attenuate others’ perceived differences with the focal member (i.e., “recategorization” effect). Interestingly, Zhu et al. did not distinguish directors’ expertise- and demographic-related cues. It is unclear whether similarities in a director’s professional experiences or demographic characteristics drove the effect. With this in mind, this dissertation extends Zhu et al.’s findings by identifying expertise cues as key antecedents of a director’s appointment to major committee positions and examine her demographic similarity in age and race with others as key contingency factors that facilitates such a “recategorization” effect. Specifically, I argue that, when a female director is similar to other board members in terms of race and age categories, board members in general are likely to make more positive evaluations about her expertise cues. In contrast, when a female director is substantially dissimilar to others in terms of race and gender, board members perceive higher difference and are less likely to make positive evaluations about her expertise cues. The proposed three-way interactive is illustrated in Figure 2. Hypothesis 4: A director’s demographic similarity with other members moderates the interactive effects of the director’s expertise cues and gender on the appointment to major board committees as a (a) member or (b) chair, such that the demographic similarity strengthens the positive effects of a female director’s expertise cues on her committee appointments. 32 Figure 2. Proposed interactive effects of expertise cues x director gender x demographic similarity 33 Boards’ demographic configurations as contextual factors: Boards’ demographic heterogeneity I also propose that boards’ overall heterogeneity in terms of race and age can facilitate the evaluation of directors’ expertise cues by other members in a more positive manner. Social psychology research has suggested that people are likely to evaluate a minority target more positively when they consider multiple demographic dimensions and this occurs regardless of the extent to which the target is similar to them in these dimensions (e.g., Crisp, Hewston, & Rubin, 2001; Crisp & Turner, 2011; Prati, Crisp, Meleady, & Rubini, 2016). For example, when evaluating a target who is “female,” “middle-aged,” and “Caucasian”—compared to the case of evaluating a target who is just “female”—people rely less on stereotypes and evaluate the target in a more individuated way. When considering the multitude of categorical information simultaneously, it becomes unclear “which category dimension” should be “used as a basis for discrimination”—which is referred to as the de-categorization process (Crisp & Hewston, 2007). In a board context, I suggest that higher demographic heterogeneity in terms of race and age facilitates de-categorization. Boards consisting of diverse age and race groups prompt board members to consider age and race information simultaneously with a director’s gender information. In these boards, since members are substantially different along the age and race dimensions, information that the focal target is “young” or “old” and “Hispanic” or “Asian” conveys its own signals. Given these co-existing signals, gender information becomes less salient, and biases specifically associated with being a female director can be attenuated. On the contrary, when board members are relatively homogeneous in terms of age and race, directors’ gender works as a piece of salient demographic information; female directors’ expertise cues are 34 more likely to be subject to biases associated with being a female on a board. The proposed three-way interactive is illustrated in Figure 3. Hypothesis 5: Boards’ demographic heterogeneity (other than gender) moderates the interactive effects of the director’s expertise cues and gender on the appointment to major board committees as a (a) member or (b) chair, such that the demographic heterogeneity on board strengthens the positive effects of a female director’s expertise cues on her committee appointments. 35 Figure 3. Proposed interactive effects of expertise cues x director gender x board demographic heterogeneity 36 Consequences of female representation in board committee positions So far, I have discussed how individual female directors can be assigned to powerful board positions, namely, those of major committee member or chair (i.e., corporate governance, nominating, audit, and compensation committees). Now I will turn to discussing how female representation in these committee positions shapes various board- and firm-level outcomes. Corporate governance researchers have long explored what are the implications associated with the female board representation. In doing so, their focus has centered on examining the relationship between the numerical presence of female directors and various board activities (for a review, see Kirsch, 2018). Related work drew on the well-established categorization-elaboration model (e.g., van Knippenberg, De Dreu, & Homan, 2004) and has argued that female directors can trigger broader and deeper information processing within the board with their divergent viewpoints (Adams & Funk, 2012; Bonn, 2004; Cummings et al., 2015), which, in turn, differentially shapes boards’ decisions (e.g., Loyd, Wang, Phillips, & Lount, 2013; Post & Byron, 2015; Simons et al., 1999). However, such a notion overlooks the minority status that female directors hold in most boards (Chang et al., 2019; Guldiken et al., 2019), where “the gender diverse individuals (…) are seen as tokens and they do not have the power for their ideas to be adopted” (Miller & Triana, 2009, p. 777). Moreover, boards often appoint female directors for the sake of their numerical presence and, in these cases, make little effort to integrate them into the board (Benton, 2021; Knippen et al., 2019). It is important to consider female directors’ actual ability to impact various board decisions when examining the implications associated with women on board. I propose that female representation in the major committee member or chair positions— the powerful positions of boards—may work as more proximal and relevant antecedent for 37 various board- and firm-level outcomes than the simple numerical presence of female directors on them (cf. Boehm et al., 2014; De Dreu & West, 2001). Since directors holding these positions are often associated with substantial power and influence within the board (Adams & Ferreira, 2009; Boivie et al., 2012), their specific characteristics have been thought to impact various board-level outcomes such as board monitoring quality, management compensation, and director appointment (e.g., Chin & Semadeni, 2017; Faleye et al., 2011; Guldiken et al., 2019). In this dissertation, I examine how female representation in major committee member or chair positions shapes the further promotion of board gender diversity and firm performance. I use the term female representation in major committee positions to indicate the proportion of female directors in member or chair positions across all major committees (i.e., audit, corporate governance, compensation, and nominating committees). Impact of female representation in board committee positions on the promotion of gender diversity on boards I first set out to discuss whether female representation in major board committee positions influences how gender diversity is further promoted on boards. Indeed, despite some progress made to improve board gender diversity, the question of how boards can “endogenously sustain” gender diversity has become crucial (Kogut et al., 2014, p. 894). Much evidence alludes to the possibility that the limited progress made so far derives from firms’ symbolic conformity to external stakeholder pressure, which is likely to contribute to females’ underrepresentation on boards (Knippen et al., 2019; Torchia, Calabro, & Huse, 2011); recent findings showed that boards are significantly less likely to appoint more than two women (Chang et al., 2019). Such a pattern reinforces itself as boards tend to replace an incumbent female director with another woman. Indeed, Farrell and Hersch (2005) found that boards are more likely appoint a new 38 female director when an incumbent female director exits. Thus, in order to understand how boards can sustain and expand their gender diversity in an organic manner, it is imperative to examine which factors internal to boards may increase female directors’ entry to and decrease their exits from them (Boone et al., 2004). In this dissertation, I examine whether and how female representation in major committee positions influences female directors’ exit as well as the addition of female directors to a board (cf. Schneider, 1987). I first examine female directors’ likelihood of exits as boards can better develop gender diversity when incumbent female directors are less likely to leave. Specifically, I propose that a female director’s likelihood of exit decreases compared to that of a male director when there is higher female representation in major committee positions. First, higher female representation in major committee positions may lessen the chance of a female exiting because support from powerful females allows a female director to better engage with a board. Research has suggested that helping and mentoring relationships tend to emerge among members of the same gender (e.g., Elvira & Cohen, 2001; Kunze & Miller, 2017; McDonald & Westphal, 2013; McGinn & Milkman, 2013; Rocha & van Praag, 2020). Developing such relationships has been thought to be particularly important for females’ success within elite professional groups characterized by high competition and complexity. For example, Ely (1994), in a law firm context, found that higher female representation in senior positions works as a critical source of support for junior women. McDonald and Westphal (2013), in a board context, documented that a presence of female incumbents attenuates female first-time directors’ lower likelihood of obtaining mentoring from other directors than male first-time directors. Thus, it can be reasonably argued that, in the present context, higher female representation in major committee positions is likely to benefit many female directors on a board, more so than male directors, by providing high-quality 39 resources and support. Females serving major committees as members or chairs tend to be more knowledgeable about management and the board have more power to support other female directors; they spend extra time and put additional effort into examining various board matters, and they are at the center of board interactions (Masulis & Mobbs, 2014; Masulis & Zhang, 2019). When these female committee members or chairs share insider information with and provide advises to other females—including those with or without a committee assignment—a female director receiving such support may feel engaged with and involved in the focal board. As a result, a female director’s likelihood of exit decreases compared to that of a male director when the female representation in the powerful positions of the board increases (Boivie et al., 2012; Ibarra, 1992; Popielarz & McPherson, 1995). Second, higher female representation in major committee positions may signal that a board values diverse opinions and insights, allowing a female director to feel more respected and valued on the board. It has been suggested that minority members observe how others who are demographically similar are treated in their work group to make a sense whether they can be successful as a part of the group (McGinn & Milkman, 2013). In particular, the extent to which a group’s powerful positions are composed of minority members is a key indicator and signals that minority members are valued (e.g., Elvira & Cohen, 2001; Ely, 1995; Daily & Dalton, 2003; Huffman, Cohen, & Pearlman, 2010; Kanter, 1977; Pfeffer, 1983; Ridgeway, 1988). In a board context, I propose that a focal female director is likely to refer to similar information to make sense of whether the board will value her capabilities as a director. Specifically, with higher female representation in major committee positions, a focal female director possesses the expectation that she will be treated fairly (Dwertmann, Nishii, & Van Knippenberg, 2016; Hicks- 40 Clarke & Iles, 2000; Kossek & Zonia, 1993), which further decreases her likelihood of exiting the board (e.g., Gonzalez & Denisi, 2009; McGinn & Milkman, 2013). Taken together, I propose that female representation in major committee positions is likely to foster a female director’s feeling of engaging with a board, which, in turn, decreases her likelihood of exiting. Within such an environment, a female director is more likely to receive high-quality support and expect that her presence will be valued. Hypothesis 6. A female director’s likelihood of exit is lower in firms with higher female representation in major committee (a) member or (b) chair positions. Another way that boards can further promote their gender diversity is through the addition of more female directors. Specifically, I propose that boards are more likely to add new female directors when there is higher female representation in major board committee positions. Two mechanisms underlie this relationship. First, higher female representation in major committee positions may work as a powerful internal force to promote gender equality values on the board. Research has long suggested that the demographic group that represents the power structure within an organization determines how a resource is allocated to serve the interests of that particular group (Cohen & Huffman, 2007; Pfeffer, 1983; 1989). Following this logic, related research has documented that higher female representation in leadership positions can significantly decrease organization-wide gender inequality in terms of the selection (Cohen & Broschak, 2013; Guldiken et al., 2019; Huffman et al., 2010), compensation (Cohen & Huffman, 2007), and promotion (Cohen, Broschak, & Haveman, 1998) of employees. Thus, above and beyond the previously noted mechanism related to women’s direct mutual helping relationships, females in powerful positions can play a change-agent role by facilitating board-level decisions that benefit females’ interests. A recent study by Guldiken et al. (2019) made an important 41 contribution by examining the role of females on nominating committees, which play key roles in the director selection process. They found that female directors on nominating committees tend to instigate other members to include more females as director candidates. Such a change agent role is well reflected in a quote from one of their interviews: “If the initial list of candidates contains only male candidates, a female (…) might be way more focused [than the men] on why there aren’t any women on the list” (Guldiken et al., 2019, p. 2038). Above and beyond such an insight, I take a broader view and suggest that female directors in any major committee positions can impact the director selection process. Indeed, director selection is not solely determined by nominating committees; it also involves all board members, where they recommend potential candidates and make a collective decision on which candidates to place on the proxy for shareholder vote (Clune, Hermanson, Tompkins, & Ye, 2014; Withers, Hillman, & Cannella, 2012). Thus, female directors in any committee position can recommend and endorse female candidates and their power and influence can facilitate this process. As such, higher female representation in major committee positions is likely to exert both explicit and implicit pressure on the board to improve its overall gender diversity level, which will prompt them to add more female directors. Second, higher female representation on major board committees may enhance the likelihood of adding more female directors by debunking board members’ disbelief with regard to females’ competence. With the emerging trend of female advantage in the director labor market, female directors face disbelief regarding their actual competence (Benton, 2021; Naumovska et al., 2020). Related works showed that, under such circumstances, board members are less likely to closely involve females in board interactions (Benton, 2021; Knippen et al., 2019). However, such disbelief can decrease when group members have higher exposure to the 42 female members and observe their contributions (e.g., Joshi & Roh, 2009; Pettigrew, 1998; Pettigrew & Tropp, 2006), which I suggest is likely to occur with higher female representation on major board committees. Given that directors serving committees are at the center of board interactions and highly visible, higher female representation in these positions increases the opportunity for board members to observe females making contributions on various board matters (Kolev et al., 2019; Masulis & Zhang, 2019). Throughout this process, disbelief concerning female directors’ competence may diminish, and board members may develop more open attitudes about having more female directors on the board. Consequently, boards are more likely to consider female candidates in their future director selection processes, increasing the possibility of them adding more female directors. To summarize, I suggest that female representation in major board committee positions indicates board members’ overall motivation to promote gender equality on a board. When there is a higher number of females in committee positions, female directors can better push for initiatives to appoint more females, and board members can resolve their concerns about females’ actual competence. Such a climate for diversity, in turn, works as a motivating force to further increase the number of females on boards. Hypothesis 7. Female representation in major board committee (a) member or (b) chair positions will be positively associated with the addition of female directors to a board. Impact of female representation in board committee positions on firm performance The final question this dissertation aims to address is whether and how female representation in major committee positions—namely, powerful positions on boards—may impact firm performance. It is an important area to consider, given that the extensive line of research examining the numerical presence of female directors on the board and firm 43 performance has shown mixed results (e.g., negative: Adams & Ferreira, 2009; null: Miller & Triana, 2009; positive: Abdullah et al., 2016). Although a recent meta-analysis by Post and Byron (2015), which is based on 109 study findings, 5 showed a positive relationship, they also noted that the effect size was small. One of the reasons for the relatively small relationship found by Post and Byron may come from somewhat mixed pattern of extant findings across different samples and studies. This suggests that there is heterogeneity in the effects associated with female board membership, and there might be other factors that closely affect this relationship. As noted previously, I argue that the degree to which female directors are valued and have voice within the board may closely shape the females’ actual impact on board above and beyond their numeric presence. In this dissertation, I examine the relationship between female representation in powerful board positions (i.e., major committee member or chair positions) and firm performance. I propose that higher female representation in major committee positions facilitates females’ expression of divergent insights, which, in turn, benefits firm performance. First, higher female representation in committee positions indicates females’ relative influence in making major board decisions. Indeed, although committees only consist of a small number of directors, they delegate many of the important board duties. Each committee member or chair is required to actively participate in and take responsibility for committee-related tasks (cf. Masulis & Mobbs, 2014). Such a formal responsibility to participate motivates females to actively express and discuss their insights with other members, which ultimately enhances the decision quality of the board. 5 Of 144 studies that Post and Byron (2015) included, 109 study samples are used to examine the relationship between female board representation and accounting performance. 44 Moreover, I also propose that higher female representation in major committee positions motivates female directors, including the ones that do not hold committee positions, to freely voice their viewpoints. With more females holding committee positions, female directors are likely to develop a sense that boards value diversity (e.g., Elvira & Cohen, 2001; Ely, 1995; Daily & Dalton, 2003; Huffman et al., 2010; Kanter, 1977; Pfeffer, 1983; Ridgeway, 1988). Such an understanding allows them to feel psychologically safe when expressing divergent viewpoints and sharing their knowledge, which, in turn, can prompt elaborated decision-making processes on boards (Boehm et al., 2014; Kirkman, Cordery, Mathieu, Rosen, & Kukenberger, 2013). Combining the above arguments, I propose that female representation in major board committee positions may have significant performance implications. This is because the beneficial effects of diversity—“the consideration of multiple perspectives along with enhanced deliberativeness”—can be realized when these “multiple perspectives” are openly communicated without a fear of being excluded (Post & Byron, 2015, p. 1549). Higher female representation in major committee positions facilitates such a process by actively involving females in important board interactions and by signaling the fact that boards value diversity. The theoretical framework is illustrated in Figure 4. Hypothesis 8. Female representation in major board committee (a) member or (b) chair positions will be positively associated with firm performance. 45 Figure 4. The conceptual model of this dissertation 46 METHODS Sample and Data Collection I used a sample of U.S. firms listed in the S&P Composite 1500 from 2009 to 2019. Since the S&P 1500 index covers about 90% of the overall market capitalization of U.S. stocks, many corporate governance studies use this index as their sampling frame (e.g., Benton, 2021; Knippen et al., 2019). The primary source for director and board data is BoardEx and Institutional Shareholder Services (ISS). Compiling data from these two databases provides comprehensive information on directors’ background, their committee memberships, and various board characteristics. Firm- level data was collected and combined from COMPUSTAT, EXECUCOMP, MSCI ESG (formerly known as KLD stats), and Bureau of Labor Statistics. Specifically, COMPUSTAT and proxy statement are used to obtain firms’ financial data (e.g., firm performance). EXECUCOMP is used to collect CEO data. Lastly, Bureau of Labor Statistics is used to collect industry-level employment of the female workforce. To test the hypotheses about a director’s attainment of committee memberships and chair positions (i.e., Hypotheses 1 through 5), I constructed a director-level panel dataset combining the data from BoardEx and ISS. Given that only outside directors are eligible for committee positions (e.g., Kolev et al., 2019), the sample excluded inside directors. Still, I collected the demographic data of insider directors to measure the moderating variables (i.e., relational similarity and board demographic heterogeneity). After deleting observations with missing data, I had 100,864 observations for 20,468 directors. I also used the director-level panel dataset to test the hypothesis on the female directors’ representation on powerful positions on boards and director exit events. In doing so, I only included the samples of directors who started their 47 directorship for a focal firm in 2009 or later. This is to control for other external factors that could have affected the directors’ likelihood of exit (e.g., Andrus, Withers, Courtright, & Boivie, 2019). After restricting the sample and deleting missing values, the data had 43,889 observations for 11,401 directors. I also created a firm-level panel dataset to test the hypotheses on the female directors’ representation on powerful positions on boards and its firm-level consequences (i.e., Hypotheses 6 through 8). The director-specific variables were aggregated to create a board-level variables; for example, director tenure was aggregated to create a variable that captures the average tenure of board members. The final dataset had 14,029 observations for 1,931 firms. Dependent variables Committee appointment. I coded committee membership as 1 if a director serves any of these committees as a member in year t+1 (e.g., Benton, 2021; Peterson & Philpot, 2007). Following previous research, I defined four major committees of the board as audit, corporate governance, compensation, and nomination committees (e.g., Garg et al., 2018; Zhu et al., 2014). Committee chair appointment. Consistent with committee appointment, I coded committee chair as 1 if a director serves as a chair of the above four committees or as a board chair in year t+1. Director exit. Director exit was coded 1 if a director has left the board within three years from the focal year, and 0 if the director has stayed during the three-year period. Past works have used three-year window when measuring exit because it is a standard term for director service (Boivie et al., 2012; Harrison, Boivie, Sharp, & Gentry, 2018). Scholars have used the three-year window regardless of the analytical method they used to ensure that they capture directors avoiding re-election at least once. 48 Addition of female directors. I measured the addition of female directors in year t+1 using a dummy variable. The use of a dummy variable is justifiable, given that the increase of two or more female directors in a single year is a rare event. 6 I coded 1 if a board appoints one or more new female director for a given year and 0 if none are appointed. Firm performance. Corporate governance scholars have widely used return on assets (ROA) as a firm performance measure when they examine whether internal management has been improved due to a better board functioning (e.g., He & Huang, 2011; Khanna, Jones, & Boivie, 2014; Triana et al., 2014). This is because a firm’s operational effectiveness is better reflected in the accounting-based performance (e.g., ROA) than in the market-based performance (e.g., Tobin’s Q), which mainly represents the perceptions of the external market. Given the focus of my theory—whether the higher proportion of female directors in committee positions increases the firm’s operational effectiveness—I used industry-adjusted return on assets (ROA; with one-year lead). I first divided net income by total assets to calculate ROA for each firm year. Then, I subtracted the industry mean ROA. This would capture the firm’s operational effectiveness aside from the industry effects (Knippen et al., 2019; Krause, Semadeni, & Cannella, 2013). Independent variables A director’s expertise cues. In this study, the expertise cue is defined as a director’s explicit characteristics that signal his/her competence as a director. Given that the primary roles of the boards include resource provision and monitoring (Hillman & Dalziel, 2003), a director thought to make a substantial contribution in these domains can garner deference from others. Specifically, research has identified expertise cues such as a director’s operational and financial 6 Knippen et al. (2019) report that such occurrences account for less than 1% of the observations in their sample of S&P 1500 firms during the 12-year period (2004-2015). 49 expertise (i.e., professional background; Veltrop et al., 2017), the number of board memberships (He & Huang, 2011), and affiliations with elite institutions (Acharya & Pollock, 2020). A director with such characteristics is viewed as competent and attains higher power and influence on boards. Thus, I measured and used these four indicators to measure expertise cues. First, corporate governance scholars suggest that boards value directors with operational and financial expertise above and beyond other types of expertise (Benton, 2021; Guner, Malmendier, & Tatec, 2008; Veltrop et al., 2017). Following Acharya and Pollock (2020) and Benton (2021), I used a dummy variable to capture a director’s expertise cues with respect to his/her professional background. I coded 1 if the director has at least one of the following credentials: (1) whether the director has worked as a CEO or as a chief operating officer (COO) of other for-profit companies (i.e., operational expertise) or (2) whether the director has had an experience as a chief finance officer (CFO), chief accounting officer (CAO), or has worked in the financial institutions such as investment/commercial banks and private equity funds (i.e., financial expertise). Second, I included a director’s number of board memberships because it signals an individual’s skills and experiences as a director (He & Huang, 2011). Since boards prefer directors “who are demonstrably experienced and skillful” (He & Huang, p. 1126), it has been suggested that highly competent directors are invited to sit on multiple boards (Garg et al., 2018; Triana et al., 2014). I used the number of public boards on which the focal director has served, excluding the focal board. Third, research suggests that others infer a director’s competence from his/her elite education background (Acharya & Pollock, 2013; Garg et al., 2018; Westphal & Khanna, 2003). This is because a director, once affiliated with elite educational background, can bring valuable 50 resources, such as legitimacy and elite social network, to the focal board (e.g., Chen, Hambrick, & Pollock, 2008). I coded a director’s affiliation with elite educational institutions 1 when the director has a degree from a prestigious university listed in Finkelstein (1992). Finally, I standardized each of these indicators and averaged them to capture a multi-dimensional construct of a director’s status cues. Female representation in board committee memberships. Female representation in board committee memberships reflects the number of female directors taking seats in key committees, including audit, corporate governance, compensation, and nomination committees. It is a board-level variable and signifies the collective influence and control female directors hold in the boardroom. To measure this variable, I calculated the ratio of female committee members to the total number of directors serving as the four major board committees. Female representation in board committee chair positions. Consistent with the female representation in board committee memberships, I calculated the ratio of female chairs to the total number of chair positions on the board (i.e., board chair and the chair of four major committees). Moderator variables Director gender. I coded a director’s gender as 0 if the director is male and 1 if the director is female. A director’s demographic similarity with other members. Two demographic characteristics were used to construct a director’s demographic similarity with other members: age and race. Age and race are the salient demographic characteristics that people use to categorize in- versus out-groups and have been widely used in research on status characteristics (e.g., Bunderson, 2003b) and organizational demography (e.g., Chattopadhyay, Tluchowska, & 51 George, 2004; Westphal & Zajac, 1995). Following Zajac and Westphal (1996), I created similarity measures for age and race. To calculate similarity measure for age, I used Euclidean distance measure, which is the following: (𝑋 − 𝑋 ) 𝑛−1 𝑋 is the age of focal director i, 𝑋 is the age of board member j, and n is the number of directors on the focal board. Next, I converted the measure by subtracting each value from the highest value in the sample. As a result, high values indicate that the focal director is highly similar to other members in age. Computing similarity measure for the race needs a different approach because it is a categorical variable. Since I am interested in calculating the extent to which a board consists of directors with a similar racial background to the focal director, I used a variant of Blau’s index. Specifically, I used the formula ∑ 𝑝 (Zajac & Westphal, 1996), where 𝑝 is the percentage of members in the ith category. I created a dummy variable that captures whether a board member falls under the same racial category as the focal director. I coded 1 if the board member is of the same race as the focal director and 0 if otherwise. Next, I computed the proportion of board members with the same racial background (i.e., coded 1) as the focal director and squared these values. I standardized the two similarity measures for age and race and calculated their average to construct a proxy measure for how much an individual director is demographically different from the other board members. Demographic heterogeneity on boards. Similar to the demographic similarity measure described above, I used age and race as two indicators to measure demographic heterogeneity on 52 boards. It captures the degree to which board members excluding the focal director are diverse in terms of age and race. I measured board heterogeneity in age by calculating the coefficient of variation (i.e., standard deviation divided by the mean) of board members’ age information, excluding the focal director. Board heterogeneity in a race was computed by using Blau’s index calculated as 1- ∑ 𝑝 . I computed the percentage of board members in each racial category (i.e., Asian, Black, Hispanic, Indian, Middle Eastern, Native American, Native Hawaiian), squared and summed these values, and subtracted from 1. Then, I standardized race and age heterogeneity and used the average of these two indicators as a final measure of demographic heterogeneity on boards (Zhu et al., 2014). Control variables In analyzing a directors’ expertise cues on his/her attainment of committee positions, I included a set of director, board, CEO, and firm characteristics to control for alternative mechanisms. As for the director characteristics, I included two individual-level control variables: whether a director is a CEO of a firm for a given year (i.e., code 1 if active CEO); and the director’s board tenure. I included active CEO to control for director busyness, which has been thought to impact a director’s job performance and their committee appointment (e.g., Falato, Kadyrzhanova, & Lel, 2014; Liu & Paul, 2015). Research has measured director busyness by capturing if the director serves as a CEO (Field, Lowry, & Mkrtchyan, 2013; Garg et al., 2018). Another confounding variable that may impact the director’s expertise recognition and committee appointments is a director’s informal power, which was captured by his/her board tenure (Garg et al., 2018; Kesner, 1988). I calculated a director’s board tenure by calculating the years the director spends on the focal board. I also included a director’s regulatory body 53 experience as it may signify a director’s connections with key government agencies (e.g., Adams, Akyol, & Verwijmeren, 2018; Lester, Hillman, Zardkoohi, & Cannella, 2008). I coded the regulatory body experience as 1 if the director has had affiliation with any of the regulatory agencies listed in Federal regulatory directory (2006).7 At the board level, I controlled for the board tenure variance, female representation, and board size. Since these board characteristics shape the interactions among the directors (e.g., Acharya & Pollock, 2020; Cheng, 2008; Triana et al., 2014; Tuggle, Schnatterly, & Johnson, 2010), they might impact a focal director’s expertise recognition and his/her likelihood of attaining committee positions. Board tenure variance was measured using the coefficient of variation (i.e., standard deviation divided by the mean) of directors’ tenure, excluding the focal director. Board size was measured by counting the number of directors on the focal board for a given year. Female representation was operationalized by calculating the proportion of female directors on the board. CEO-level controls included CEO duality and CEO gender. I included CEO duality to account for an alternative explanation that the committee appointments are subject to the preferences of the powerful CEO (cf. Westphal & Zajac, 1995). I coded 1 if a CEO also serves as a board chair for a given year. I also included CEO gender because male and female CEOs might impact various board decisions differently (Knippen et al., 2019). I coded 1 when a CEO was a female. As for the firm characteristics, I controlled for firm size, firm performance, and firm diversity index. Firm size was included because larger firms are subject to higher institutional pressure for gender equality (Hillman et al., 2007). I measured firm size as the log of each firm’s 7 The list involves 31 regulatory agencies such as Federal Reserve System, Securities and Exchange Commission, and Food and Drug Administration. 54 number of employees. I also controlled for firm performance in the previous year because board processes are often affected by how well the firm has performed (Triana et al., 2014). Firm performance was measured as industry-adjusted ROA in the year t-1.8 I included firm diversity index to control for the firm’s values for gender diversity; firms that emphasize these values are more likely to recruit female directors who are better qualified and to assign females to major committee positions. Industry-level controls included industry female employment and industry dummies. I controlled for industry female employment because it may shape people’s perception of women holding power within a given industry (e.g., Cumming, Leung, & Rui, 2015; Hillman et al., 2007). In industries with high level of female workforce, the degree to which masculinity is associated with directorship could be lesser. Following Hillman et al. (2007), I measured the proportion of the female workforce within the firm’s industry. Moreover, I included industry dummies to account for industry-level heterogeneity. In the analysis of female representation in board committee positions and its consequences (i.e., female director longevity, the addition of female directors, and firm performance), I included the same set of control variables for the board, CEO, and firm characteristics. I aggregated controls for individual director characteristics to the board level because all the variables used for this analysis reside at the board and firm levels. Specifically, active CEO was measured by the proportion of directors who also concurrently work as a CEO of another company. Lastly, board tenure was computed by averaging the number of years the board members spent on a focal board. 8 Lagged firm performance is not included as a control in the empirical model testing the female representation in committee positions on firm performance given the issues associated with including lagged dependent variable as one of the covariates. 55 Analytical models The first analysis on a director’s expertise cues and his/her attainment of board committee positions (i.e., Hypotheses 1 through 5) used a panel data set comprising the population of directors in S&P 1500 firms between 2009 and 2019. Since the dependent variables (i.e., committee appointment and committee chair appointment) are dichotomous, I used a logit panel regression. Specifically, I used a population-averaged logit regression model, which is a generalized estimating equation (GEE). GEE is a viable option when the covariates include time-invariant variables and the observations across time are likely to be highly correlated. I clustered standard errors at the firm level and included fixed effects of time and industry in the model. In the analysis of female representation in board committee positions and female director exit (Hypothesis 6), I used a stratified Cox proportional hazard model. The Cox model has been widely employed in turnover studies because it accounts for the time it takes for an event to occur (Arthaud-Day, Certo, Dalton, & Dalton, 2006; Boone, van Olffen, van Witteloostuijn, & De Brabander, 2004; Harrison et al., 2018). Since the data is in multiple-record form using dummy coded variable to indicate director exit (StataCorp, 2017), I used Stata command to calculate the time it took from director’s entry to the board to the exit. I tested the proportionality assumption using Schoenfeld’s residuals and found that the global test was statistically significant, violating the assumption (female representation in committee positions: χ2 = 3080.69, p < 0.001; female representation in member positions: χ2 = 3105.69, p < 0.001). One solution to deal with this is to stratify on the non-proportional variables (UCLA, n.d.). In line with Harrison et al. (2018), I further investigated this issue and found that survival functions were not equal across firms (χ2 = 7217.55, p < 0.001) and directors’ age (χ2 = 1272.35, p < 56 0.001). Therefore, I stratified the model both by firm and director age, which would account for unobserved firm- and director cohort-specific characteristics. Next, I clustered robust standard errors at the director level to address any biases associated with directors’ multiple board appointments. I only included industry fixed effects because the Cox model already accounts for time in the estimation. For the analyses of female representation in board committee positions and board- and firm-level outcomes (i.e., Hypotheses 7 through 8), I shifted to a board- and firm-level sample. Since firm performance is continuous and time-variant, I used a fixed-effects panel regression model with robust standard errors. Only year dummies were included because industry dummies were dropped as they were time-invariant. Moreover, the addition of female directors is a dichotomous variable and varies over time. Thus, when examining this dependent variable, I employed a fixed-effects logit panel regression model with robust standard errors. I found that the fixed-effects logit model dropped firm samples that do not change over time, reducing the sample size by 15.5% (i.e., 11,857 observations for 1,352 firms). I ran the additional analyses using a population-averaged approach, and the results were consistent. 57 RESULTS Table 1 presents the variable means, standard deviations, and correlations for the director-level data. Table 2 provides the results of the population-averaged logit regression on the probability of a director holding a major committee member or chair position. All variables in the model were standardized. Running test diagnostics for collinearity shows the highest VIF value of 1.13, which does not exceed the cutoff value of 10. Thus, there is little concern about multicollinearity. Each model in Table 2 presents logit coefficients. Interpreting logit coefficients are complicated because they estimate how a unit change in an independent variable is linearly related to the log-odds of the dependent variable. (Wiersema & Bowen, 2009). Thus, scholars have recommended using the average marginal effect, which is calculated by averaging partial effects across the different values of the sample (e.g., Hoetker, 2007; Train, 1986; Wooldridge, 2015). This approach is particularly useful because it allows us to interpret the results in terms of the differences in probability not the odds. In Table 2, Models 1 to 5 test the effects of a director’s expertise cue on all committee memberships, and Models 6 to 10 test committee chair positions. Models 1 and 6 display population-averaged logit results for the control-only model. The results for Models 1 and 6 reveal that several control variables impact a director’s likelihood of serving committee membership and chair positions. In Model 1, the average marginal effect estimates suggest that serving a CEO position in another firm in a given year increases a director’s probability of serving committee membership by 1.3%, and having a 1-standard deviation (SD) increase in board tenure decreases the likelihood of serving committee membership by 5.4%. In addition, working for a board bigger in size by 1-SD reduces the probability of serving committee membership by 3.1%, and serving directorship for a company 58 whose performance last year is 1-SD higher increases the likelihood of serving committee membership by 0.5%. In Model 6, the average marginal effect estimates show that a director’s serving a CEO position in another firm decreases his or her probability of serving chair positions by 5.3%, having a 1-SD increase in board tenure increases the likelihood of serving chair positions by 7.8%, and having a regulatory body experience decreases the probability of serving chair positions by 7.2%. In addition, working for a board bigger in size by 1-SD reduces the chance of serving chair positions by 8.1%, working for a board where the CEO also plays a role as a chair decreases the probability of serving chair positions by 5.2%, having a female CEO increases the probability of serving chair positions by 2.4%, serving a larger company in terms of the number of employees by 1-SD reduces the possibility of serving chair positions by 1.2%, and working for a company whose performance is higher by 1-SD reduces the possibility of serving chair positions by 0.6%. 59 Table 1. Descriptive statistics and correlations for analyses on director’s likelihood of serving committee membership and chair positions Variables Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Committee 1 0.76 0.43 membershipt+1 2 Chairt+1 0.41 0.49 -0.22 3 Expertise cue 0.02 0.63 -0.00 0.05 4 Director gender 0.20 0.40 0.05 -0.08 -0.01 5 Demo. similarity 0.02 0.72 -0.02 0.07 -0.08 -0.08 Demo. 6 -0.01 0.69 -0.02 -0.03 0.06 0.04 -0.45 heterogeneity 7 Active CEO 0.22 0.41 0.02 -0.07 0.17 -0.02 -0.08 0.03 Director board 8 8.21 6.83 -0.14 0.16 -0.04 -0.12 0.14 -0.04 -0.09 tenure Regulatory body 9 0.02 0.13 -0.00 -0.03 0.02 0.05 -0.03 0.02 -0.02 -0.01 experience Board tenure 10 0.72 0.24 -0.02 -0.03 -0.01 0.03 -0.05 0.11 0.03 -0.06 -0.00 variance Female 11 0.17 0.11 -0.04 -0.06 0.08 0.29 -0.20 0.11 0.02 -0.08 0.03 0.10 representation 12 Board size 10.03 2.41 -0.07 -0.17 0.05 0.06 -0.03 0.11 0.04 -0.01 0.04 0.14 0.18 13 CEO duality 0.40 0.49 0.00 -0.07 -0.00 0.02 -0.02 0.01 0.02 0.02 0.02 -0.00 0.07 0.10 14 CEO gender 0.05 0.21 -0.01 0.00 0.02 0.03 -0.06 0.03 0.01 -0.03 -0.00 0.02 0.28 -0.01 -0.01 15 Firm size 1.96 1.72 -0.02 -0.10 0.17 0.08 -0.18 0.19 0.06 -0.04 0.03 0.10 0.27 0.37 0.12 0.05 Firm 16 0.01 0.08 -0.00 -0.02 0.01 0.02 -0.00 0.03 0.00 0.03 0.00 -0.04 0.05 0.04 0.04 -0.00 0.06 performancet-1 Industry female 17 0.30 0.14 -0.03 -0.02 -0.05 0.03 -0.03 0.10 -0.01 0.00 -0.01 0.00 0.08 0.14 0.04 0.02 0.08 0.06 employment N = 100,864 for 20,468 directors. Correlations greater than |.007| is significant at 0.05 level. 60 Table 2. GEE regression results on the committee member and chair appointments. DV: Committee membership DV: Chair Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 Model 8 Model 9 Model 10 β (s.e.) β (s.e.) β (s.e.) β (s.e.) β (s.e.) β (s.e.) β (s.e.) β (s.e.) β (s.e.) β (s.e.) Active CEO 0.08 (0.04)* 0.09 (0.04)* 0.09 (0.04)* 0.09 (0.04)* 0.09 (0.04)* -0.24 (0.03)** -0.30 (0.03)** -0.30 (0.03)** -0.30 (0.03)** -0.30 (0.03)** Director board tenure -0.32 (0.01)** -0.30 (0.01)** -0.30 (0.01)** -0.30 (0.01)** -0.30 (0.01)** 0.35 (0.02)** 0.33 (0.02)** 0.33 (0.02)** 0.33 (0.02)** 0.33 (0.02)** Regulatory body -0.02 (0.11) -0.07 (0.11) -0.07 (0.11) -0.07 (0.11) -0.07 (0.11) -0.32 (0.11)** -0.29 (0.11)* -0.30 (0.11)* -0.29 (0.01)* -0.29 (0.11)** experience Board tenure variance -0.01 (0.01) -0.01 (0.01) -0.01 (0.01) -0.01 (0.01) -0.01 (0.01) 0.01 (0.01) 0.01 (0.01) 0.01 (0.01) 0.01 (0.01) 0.01 (0.01) Female representation 0.01 (0.02) -0.03 (0.02)+ -0.03 (0.02)+ -0.03 (0.02)+ -0.03 (0.02)+ -0.00 (0.02) 0.03 (0.02)* 0.03 (0.02)* 0.03 (0.02)* 0.03 (0.02)* Board size -0.18 (0.02)** -0.18 (0.02)** -0.18 (0.02)** -0.18 (0.02)** -0.18 (0.02)** -0.36 (0.02)** -0.38 (0.02)** -0.38 (0.02)** -0.37 (0.02)** -0.38 (0.02)** CEO duality 0.02 (0.03) 0.02 (0.03) 0.02 (0.03) 0.02 (0.03) 0.02 (0.03) -0.23 (0.03)** -0.22 (0.03)** -0.22 (0.03)** -0.22 (0.03)** -0.22 (0.03)** CEO gender -0.07 (0.07) -0.04 (0.07) -0.04 (0.07) -0.04 (0.07) -0.04 (0.07) 0.11 (0.06)+ 0.08 (0.06) 0.08 (0.06) 0.08 (0.06) 0.08 (0.06) Firm size 0.00 (0.02) 0.01 (0.02) 0.00 (0.02) 0.00 (0.02) 0.00 (0.02) -0.05 (0.02)** -0.08 (0.02)** -0.08 (0.02)** -0.08 (0.02)** -0.08 (0.02)** Firm performancet-1 0.03 (0.01)+ 0.03 (0.01)** 0.03 (0.01)** 0.03 (0.01)** 0.03 (0.01)** -0.03 (0.01)** -0.03 (0.01)** -0.03 (0.01)** -0.03 (0.01)** -0.03 (0.01) Industry female 0.01 (0.07) 0.01 (0.07) 0.00 (0.07) 0.01 (0.07) 0.01 (0.07) -0.02 (0.06) -0.01 (0.06) -0.01 (0.06) -0.01 (0.06) -0.01 (0.06) employment Expertise cue -0.02 (0.02) -0.02 (0.02) -0.02 (0.02) -0.02 (0.02) 0.18 (0.01)** 0.18 (0.02)** 0.18 (0.02)** 0.18 (0.02)** Gender 0.33 (0.04)** 0.33 (0.04)** 0.33 (0.04)** 0.33 (0.04)** -0.25 (0.04)** -0.25 (0.04)** -0.25 (0.04)** -0.25 (0.04)** Demo. similarity -0.04 (0.02)* -0.03 (0.02)* -0.03 (0.02) -0.03 (0.02)* 0.10 (0.02)** 0.10 (0.02)** 0.09 (0.02)** 0.10 (0.02)** Demo. heterogeneity -0.03 (0.01)+ -0.03 (0.01)+ -0.02 (0.01)+ -0.03 (0.02)+ 0.04 (0.01)** 0.04 (0.01)** 0.04 (0.01)** 0.04 (0.02)* Expertise cue x gender -0.02 (0.04) -0.02 (0.04) -0.02 (0.04) 0.02 (0.03) 0.02 (0.03) 0.02 (0.03) Expertise cue x 0.02 (0.02) 0.01 (0.01) similarity Gender x similarity -0.03 (0.04) 0.03 (0.03) Expertise cue x -0.01 (0.01) 0.01 (0.02) heterogeneity Gender x heterogeneity 0.03 (0.03) 0.00 (0.03) Expertise cue x gender -0.03 (0.04) -0.03 (0.03) x similarity Expertise cue x gender -0.00 (0.03) 0.02 (0.04) x heterogeneity Intercept 1.48 (0.30)** 1.41 (0.31)** 1.42 (0.31)** 1.41 (0.31)** 1.41 (0.31)** -0.02 (0.31)** 0.04 (0.32)** 0.04 (0.32)** 0.05 (0.32)** 0.05 (0.32)** Industry dummy YES YES YES YES YES YES YES YES YES YES Year dummy YES YES YES YES YES YES YES YES YES YES Wald χ2 3272.80** 3321.26** 3320.99** 3324.53** 3324.87** 1448.02** 1699.03** 1699.54** 1699.65** 1703.09** Notes: For all model, n = 100,864 director-firm years for 20,468 directors, robust standard errors in parentheses, two-tailed significance tests.+ * p < 0.10, p < 0.05, ** p < 0.01 61 In Table 2, Models 2 and 7 present the main effects model to test the effects of expertise cue and director gender on committee members and chair positions. Hypotheses 1a and 1b state that the expertise cue is positively associated with a director’s probability of serving committee member or chair positions. As shown in Model 2, the effect of the expertise cue on a director’s serving committee membership is insignificant (β = -0.02, p=0.20). Thus, hypothesis 1a is not supported. However, Model 7 shows a positive and significant effect of expertise cue on a director’s serving committee chair positions (β = 0.18, p < 0.01), supporting hypothesis 1b. Examining the average marginal effect for chair positions reveals that a 1-SD increase in the expertise cue increases a director’s probability of serving committee chair positions by 4.1%. Hypotheses 2a and 2b predict that being a female director is negatively associated with a director’s probability of serving committee member or chair positions. The coefficients of gender in Model 2 show that being a female has a positive and significant relationship with a director’s serving committee membership (β = 0.33, p < 0.01), not supporting hypothesis 2a. As shown in Model 7, however, being a female has a negative and significant relationship with a director’s serving chair positions within the board (β = -0.25, p < 0.01), consistent with hypothesis 2b. The average marginal effect for chair position indicates that when the director is female, the director’s probability of serving chair positions decreases by 5.5%. Models 3 and 8 are used to test hypotheses 3a and 3b, which posit a two-way interaction between a director’s expertise cue and gender on his or her serving committee membership and chair positions. The coefficient estimate of the interaction term in Model 3 is insignificant (β = - 0.02, p=0.58). Thus, hypothesis 3a is not supported. Similarly, the interaction coefficient estimate of the interaction term in Model 8 is insignificant (β = 0.02, p=0.60), not supporting Hypothesis 3b. 62 Models 4, 5, 9, and 10 display the effects of three-way interactions between expertise cue, gender, and two board-level demographic configuration variables (i.e., demographic similarity and heterogeneity) on a director’s serving committee and chair positions. Hypotheses 4a and 4b suggest a three-way interaction between expertise cue, gender, and board demographic similarity. Models 4 and 9 show that the coefficient estimates for the three-way interaction on committee member and chair positions are insignificant (Model 4: β = -0.03, p=0.39, Model 9: β = -0.03, p=0.32), which does not support hypotheses 4a and 4b. Hypotheses 5a and 5b suggest a three-way interaction between expertise cue, gender, and board demographic heterogeneity. Models 5 and 10 show that the coefficient estimates for the three-way interaction on committee member and chair positions are insignificant (Model 4: β = -0.00, p=0.91, Model 9: β = 0.02, p=0.61). Therefore, Hypotheses 5a and 5b are not supported. Table 3 provides the means, standard deviations, and correlations for variables used in the analyses of the director exits. Table 4 reports results of survival analyses on the director exits, specifically, the likelihood of director exit in response to the change in the female representation in committee member or chair positions. Model 1 only includes the control variables, and Models 2 and 3 add the interactions of gender and female representation in committee member or chair positions, respectively. Examining Model 1 shows that, of the control variables, the rate of director exit increases by 30.0% if the director works as a CEO of another company (hazard ratio = 1.30, p < 0.05), decreases by 95.3% if the director tenure is 1-SD higher (hazard ratio = 0.05, p < 0.01), decreases by 32.8% if the female board representation is 1-SD higher (hazard ratio = 0.67, p < 0.01), decreases by 35.0% if the CEO also serves as board chair (hazard ratio = 0.65, p < 0.01), increases by 132.2% if the CEO is female (hazard ratio = 2.32, p < 0.05). 63 Table 3. Descriptive statistics and correlations for analysis on director exit. Variables Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1 Director exit 0.13 0.34 Female rep. in 2 0.21 0.13 -0.02 committees Female rep. in chair 3 0.17 0.20 -0.00 0.50 positions 4 Director gender 0.25 0.43 -0.05 0.25 0.06 5 Active CEO 0.24 0.42 0.00 0.00 0.00 -0.05 6 Director board tenure 3.16 2.39 0.03 0.08 0.05 -0.07 -0.04 Regulatory body 7 0.02 0.13 -0.02 0.02 0.02 0.04 -0.02 0.01 experience Board tenure 8 0.77 0.27 0.01 0.04 0.03 0.01 0.02 -0.19 -0.01 variance Female 9 0.19 0.11 -0.02 0.88 0.46 0.28 -0.00 0.09 0.03 0.05 representation 10 Board size 10.08 2.39 0.05 0.12 0.06 0.02 0.03 -0.04 0.05 0.13 0.15 11 CEO duality 0.39 0.49 -0.02 0.05 0.04 0.01 0.04 0.00 0.04 0.02 0.08 0.12 12 CEO gender 0.06 0.24 0.02 0.09 0.08 0.02 -0.00 0.00 -0.00 0.02 0.29 0.02 -0.00 13 Firm size 2.00 1.75 0.03 0.23 0.12 0.05 0.07 0.00 002 0.05 0.26 0.38 0.15 0.07 14 Firm performancet-1 0.00 0.09 -0.04 0.06 0.02 0.03 0.01 0.03 0.01 -0.05 0.07 0.06 0.05 -0.00 0.06 Industry female 15 0.30 0.13 0.01 0.10 0.04 0.03 -0.02 -0.01 -0.01 0.03 0.10 0.13 0.00 0.02 0.06 0.06 employment N = 43,889 for 11,401 directors. Correlations greater than |.012| is significant at 0.05 level. 64 Table 4. Cox proportional hazard model results for director exit. DV: Director exit Model 1 Model 2 Model 3 Hazard ratio (s.e.) Hazard ratio (s.e.) Hazard ratio (s.e.) Active CEO 1.30 (0.13)* 1.28 (0.13)* 1.28 (1.28)* Director board tenure 0.05 (0.05)** 0.05 (0.05)** 0.05 (0.05)** Regulatory body experience 1.03 (0.39) 1.08 (0.45) 1.15 (0.48) Board tenure variance 0.93 (0.06) 0.93 (0.06) 0.94 (0.06) Female representation 0.67 (0.05)** 0.81 (0.09)* 0.74 (0.06)** Board size 0.97 (0.07) 0.97 (0.07) 0.96 (0.07) CEO duality 0.65 (0.12)* 0.66 (0.12)* 0.65 (0.13) CEO gender 2.32 (0.72)** 2.02 (0.62)* 2.22 (0.68) Firm size 0.97 (0.24) 0.95 (0.24) 0.96 (0.24) Firm performancet-1 1.04 (0.03) 1.05 (0.03) 1.05 (0.03) Industry female employment 0.46 (0.57) 0.52 (0.67) 0.43 (0.54) Gender 0.78 (0.10)* 0.81 (0.10)+ + Female representation in committee member positions 0.83 (0.09) Female representation in chair positions 0.88 (0.06)+ Female rep. in committee member positions x gender 1.11 (0.12) Female rep. in committee chair positions x gender 0.99 (0.08) Industry dummy YES YES YES Year dummy NO NO NO Wald χ2 55.91** 59.59** 59.58** Notes: For all model, N = 43,889 director-firm years for 11,401 directors, robust standard errors in parentheses (clustered on director), two-tailed significance tests. + p < 0.10, * p < 0.05, ** p < 0.01 Hypothesis 6 states that female directors, compared to male directors, are less likely to leave the board in response to changes in female representation in committee member (Hypothesis 6a) and chair positions (Hypothesis 6b). The interaction coefficients for female representation in committee and chair positions and director gender are introduced in Models 2 and 3, respectively. The hazard ratios for the interaction terms between female representation in committee (hazard ratio = 1.11, p=0.30) and chair positions (hazard ratio = 0.99, p=0.86) are not significant. Thus, Hypothesis 6 (both 6a and 6b) is not supported. 65 Table 5. Descriptive statistics and correlations for analyses on the addition of female directors and firm performance. Variables Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Addition of female 1 0.18 0.38 directorst+1 2 Firm performancet+1 0.00 0.10 0.01 3 Female rep. in committees 0.18 0.13 0.07 0.05 Female rep. in chair 4 0.14 0.19 0.01 0.02 0.53 positions 5 % of active CEO 0.29 0.14 0.01 -0.01 0.03 0.02 6 Average tenure 9.10 3.68 -0.08 0.07 -0.17 -0.12 -0.13 % of directors with 7 0.01 0.04 0.01 0.03 0.07 0.05 0.00 -0.07 regulatory body experience 8 Board tenure variance 0.71 0.25 0.11 -0.01 0.09 0.06 0.04 -0.00 -0.01 9 Female representation 0.16 0.11 0.16 0.05 0.89 0.49 0.04 -0.19 0.10 0.10 10 Board size 9.52 2.28 0.07 0.07 0.22 0.10 -0.04 -0.05 0.11 0.15 0.24 11 CEO duality 0.39 0.49 0.00 0.05 0.05 0.03 0.04 0.08 0.05 -0.01 0.06 0.07 12 CEO gender 0.05 0.21 0.06 0.00 0.09 0.07 0.05 -0.09 0.01 0.01 0.27 0.01 -0.02 13 Firm size 1.75 1.74 0.09 0.09 0.24 0.13 0.09 -0.06 0.06 0.11 0.27 0.41 0.09 0.04 14 Firm performancet-1 0.01 0.08 0.02 0.38 0.04 0.02 -0.00 0.07 0.02 -0.04 0.05 0.04 0.03 -0.00 0.05 Industry female 15 0.30 0.14 0.02 0.07 0.08 0.02 -0.05 0.04 -0.02 -0.01 0.08 0.12 0.04 0.02 0.09 0.06 employment N = 14,029 for 1,931 firms. Correlations greater than |.017| is significant at 0.05 level. 66 Table 6. Fixed-effects logit regression results for addition of female directors. DV: Addition of female directors Model 1 Model 2 Model 3 β (s.e.) β (s.e.) β (s.e.) % of active CEO 0.01 (0.04) 0.03 (0.04)** 0.01 (0.04) Average tenure 0.05 (0.06) 0.06 (0.06) 0.04 (0.06) % of directors with regulatory body experience 0.01 (0.03) -0.01 (0.04) 0.01 (0.03) Board tenure variance 0.43 (0.04)** 0.44 (0.04)** 0.44 (0.04)** Female representation -0.18 (0.05)** 1.09 (0.09)** -0.10 (0.05)** Board size -0.20 (0.06)** -0.21 (0.09)** -0.21 (0.06)** CEO duality -0.10 (0.10) -0.13 (0.06) -0.09 (0.10) CEO gender 0.48 (0.19)** -0.36 (0.22)+ 0.42 (0.19)+ Firm size 0.52 (0.16)** 0.56 (0.16)** 0.52 (0.15)** Firm performancet-1 0.01 (0.03) 0.02 (0.03) 0.01 (0.03) Industry female employment 0.69 (0.61) 0.58 (0.64) 0.50 (0.61) Female representation in committee member positions -1.54 (0.09)** Female representation in chair positions -0.33 (0.04)** Industry dummy NO NO NO Year dummy YES YES YES Wald χ2 673.02** 844.25** 715.83** Notes: For all model, N = 11,857 firm-year observations for 1,352 firms, robust standard errors in parentheses, two-tailed significance tests. + p < 0.10, * p < 0.05, ** p < 0.01 Table 5 displays the descriptive statistics for variables used in the firm-level analyses of the addition of female directors and firm performance. Table 6 presents the results of the fixed- effect logistic regression on the addition of female directors. In Table 6, Model 1 shows the results of the control variables. The average marginal effect estimates for control variables 9 revealed that the board’s probability of adding female directors increases by 6.7% when the board tenure variance increases by 1-SD. It also showed that this likelihood decreases by 1.4% when the female board representation increases by 1-SD, decreases by 3.0% when the board size increases by 1-SD, increases by 7.2% when the CEO is female, and increases by 8.9% when the firm size increases by 1-SD. Hypothesis 7 predicts that the probability of adding a female 9 Stata’s built-in command produces an inaccurate value when average marginal effects for a fixed-effects logit model are calculated. Thus, I used the probit correlated random effects approach to estimate the average marginal effects (cf. Mundlak, 1978; Wooldridge, 2005, 2010). The results of the probit correlated random effects model are consistent with those of the fixed- effects logit model. 67 director is positively related to female representation in committee (Hypothesis 7a) and chair positions (Hypothesis 7b). The fixed-effect logit regression results in Models 2 and 3 do not support Hypotheses 7a and 7b, given significant but negative coefficients for female representation in committee (β = -1.54, p < 0.01) and chair positions (β = -0.33, p < 0.01). The results revealed that the likelihood decreases by 23.2% when the female representation in member positions increases by 1-SD and decreases by 5.1% when the female representation in chair positions increases by 1-SD. Table 7 displays the results of a fixed-effect regression on firm performance. Model 1 includes the control variables. The coefficients show that firms with CEOs who also serve as board chairs have average increase in ROA of 0.9%, which corresponds to an average increase in net income of approximately 7.3 million dollars. Moreover, firms that are 1-SD larger have average decreases in ROA of 1.7%, which is approximately 12.3 million dollars in net income. Models 2 and 3 include the female representation in committee member and chair positions, respectively. Hypothesis 7 proposes that female representation in committee member (Hypothesis 7a) and chair positions (Hypothesis 7b) is positively related to firm performance. The coefficients in Models 2 and 3 are insignificant for female representation in committee member (β = 0.0019, p=0.37) and chair positions (β = -0.0009, p=0.39). These results, in general, do not support Hypothesis 7. 68 Table 7. Fixed-effects regression results for firm performance DV: Firm performance Model 1 Model 2 Model 3 β (s.e.) β (s.e.) β (s.e.) % of active CEO -0.0002 (0.002) -0.0002 (0.002) -0.0002 (0.002) Average tenure -0.0017 (0.002) -0.0017 (0.002) -0.0018 (0.002) % of directors with regulatory body experience 0.0002 (0.001) 0.0003 (0.001) 0.0002 (0.001) Board tenure variance 0.0004 (0.001) 0.0004 (0.001) 0.0004 (0.001) Female representation 0.0004 (0.002) -0.0013 (0.002) 0.0006 (0.002) Board size 0.0011 (0.002) 0.0011 (0.002) 0.0011 (0.002) CEO duality 0.0100 (0.004)** 0.0100 (0.004)** 0.0100 (0.004)** CEO gender 0.0006 (0.007) 0.0017 (0.007) 0.0004 (0.007) Firm size -0.0168 (0.008)* -0.0168 (0.008)* -0.0169 (0.008)* Industry female employment -0.0198 (0.021) -0.0195 (0.021) -0.0202 (0.021) Female representation in committee member positions 0.0019 (0.002) Female representation in chair positions -0.0009 (0.001) Intercept 0.0029 (0.003) 0.0028 (0.003) 0.0028 (0.003) Industry dummy NO NO NO Year dummy YES YES YES F 3.07** 2.97** 2.96** Notes: For all model, N = 14,029 firm-year observations for 1,931 firms, robust standard errors in parentheses, two-tailed significance tests. + p < 0.10, * p < 0.05, ** p < 0.01 Supplemental analyses I conducted additional analyses to examine alternative mechanisms by controlling for firms’ values for gender diversity and by using the subset of committee positions that are argued to be the most influential according to several studies (e.g., Benton, 2021; Boivie et al., 2012; Stevenson & Radin, 2009). I also explored how the four individual expertise cue indices might have different relationships with a director’s committee positions. In conducting supplemental analyses, I primarily focused on using committee chair positions as a focal dependent variable. The primary analysis results for committee membership positions reveal a significantly diverging prediction from what was expected, whereas the results for chair positions did not. I will address this point further in the Discussion section. 69 Gender diversity index. Firms’ inherent value for gender diversity may serve as alternative mechanisms for the hypotheses. For example, in the director-level analyses, firms that value gender diversity are likely to attract female directors with high expertise, which increases the possibility of these directors serving committee positions. In the firm-level analyses, firms valuing gender diversity may have higher female representation in committee positions, appoint and retain more female directors, and perform well. Thus, I included the control for gender diversity climate to see if it changes the result. Given that it is difficult to measure how firms value gender diversity directly, I used a proxy measure using corporate social responsibility measurements from the MSCI ESG database (formerly known as KLD). The two items that are used are the presence of female members in executive teams and of any social allegations against the firm concerning workforce diversity. 10 I exclude two diversity-related items on MSCI that capture board diversity (i.e., whether the firm has substantial board gender diversity and whether the firm has no female on the board) to reduce collinearity with another control variable (i.e., female board representation). Each firm’s score for the second item is subtracted from the firm’s score for the first item. Given that some of its diversity measures are only available up to 2011, these measures considerably reduce the sample size (i.e., director-level data: 18,563 director-firm years for 9,486 directors, firm-level data: 2,560 firm-years for 1,298 firms). 11 However, the result remains consistent with the limited time window and the inclusion of gender diversity climate as a control variable, both in the director- and firm-level analyses. The effect of the firm diversity index is positive and not significant (β = 0.02, p=0.44) in the two-way interaction model of the director-level analyses for 10 These two items involve binary responses—a 0 denotes the absence of a policy or practice and a 1 denotes the presence of a policy or practice. 11 For data used to test the hypothesis on director exit, only 1,903 observations (4.4% of the initial observations) remain when the time window is limited and missing values for the gender diversity index are dropped. This does not produce meaningful results for director exit. 70 chair positions. In the firm-level analyses, negative and insignificant for the addition of female directors (β = -0.08, p=0.52), and negative and insignificant for firm performance (β = -0.0004, p=0.78). Power differences among the four committees. In my dissertation, I assume that a director’s serving one of the four committees (i.e., compensation, audit, nomination, and corporate governance) as either a member or a chair signifies that he or she holds considerable power within a board (e.g., Garg et al., 2018; Kolev et al., 2019). However, it is possible to argue that some committees might hold greater power than others because decisions made by some committees may be considered more crucial for board functioning. Indeed, several scholars have argued that audit and compensation committees are more powerful committees (e.g., Benton, 2021; Boivie et al., 2012; Stevenson & Radin, 2009) because they require considerable levels of commitment from their members (Hsu & Hu, 2016; Masulis & Mobbs, 2014). As directors on these committees tend to spend more time on and become highly knowledgeable about the board, they are more likely to become influential. If this is the case, the effects of a director’s expertise cue and gender could differ for different committee positions. Thus, I conducted supplemental analyses using audit and compensation committee chair positions as dependent variables. Overall, I found that the results are consistent with the ones using all four major committee memberships. The effect of individual expertise cue indices. In my dissertation, I use a composite measure to capture directors’ expertise cues by averaging standardized values of four indicators of directors’ expertise, including operational expertise, financial expertise, number of board memberships, and elite degree. Such a composite approach is consistent with several prior corporate governance studies that capture directors’ overall levels of expertise (e.g., Lungeanu & 71 Zajac, 2019; Zajac & Westphal, 1996). However, each indicator may have varying effects on a director’s serving committee positions. I conducted additional analyses to investigate this issue further by including the individual expertise cue index separately into the model. In this section, I conducted two separate analyses for committee membership and chair positions because doing so may reveal where the diverging findings for these two positions have occurred. Prior to the analysis, I ran the test for multicollinearity among the four indices, and the highest VIF is 1.14, not exceeding the cutoff value of 10. This result justifies the inclusion of the four indices altogether in the model. The results for main effects of expertise cue on a director’s serving committee member and chair positions are shown in Models 1 and 3 of Table 8. Model 1 provides the population- averaged coefficient estimates for the main effects of four expertise cue indices on a director’s serving one of the member positions. Financial expertise has negative and significant relationship with a director’s committee membership (β = -0.15, p < 0.01), not supporting the hypothesized relationship. However, elite degree presents positive and significant relationship with a director’s committee membership (β = 0.09, p < 0.01). To examine these results further, average marginal effects were computed. The results show that having financial expertise decreases a director’s probability of serving memberships by 2.6%, and elite degree increases the probability by 1.5%. Model 3 presents the results for the main effects of four expertise cue indices on a director’s serving one of the chair positions. The results reveal that three expertise cue indices— including operational expertise (β = 0.10, p < 0.01), financial expertise (β = 0.28, p < 0.01), and number of board memberships (β = 0.20, p < 0.01)—have positive and significant relationship with a director’s serving chair positions, consistent with the results using the composite expertise 72 cue measure. Interestingly, the coefficient for elite degrees shows a negative and significant effect (β = -0.11, p < 0.01). Calculating the average marginal effects reveals that having operational expertise increases a director’s probability of serving chair positions by 2.3%, having financial expertise increases a director’s chance of serving chair positions by 6.3%, and a 1-SD increase in the number of board memberships a director has served increases the probability of serving chair positions by 4.5%. However, having an elite degree decreases a director’s likelihood of serving chair positions by 2%. In general, two major patterns of findings emerged from the analyses. First, and as expected, each expertise cue index showed varying effects on a director’s serving committee positions. Second, the expertise cue indices showed diverging results for a director’s serving committee member versus chair positions. For example, financial expertise showed negative relationship with a director’s serving member positions (β = -0.15, p < 0.01) but had a positive relationship with chair positions (β = 0.28, p < 0.01). Moreover, elite degree had a positive relationship with a director’s serving member positions (β = 0.09, p < 0.01) but had a negative relationship with chair positions (β = -0.11, p < 0.01). This highlights the possibility that what is viewed as an expertise cue for member and chair positions may be substantially different. In particular, the negative associations between expertise cue indices and committee memberships suggest that the operational, financial, and number of board memberships might not serve as key indicators when it comes to a director attaining these positions. Additional theory building is needed to understand what other types of cues might be considered for committee member positions and how they differ from the cues valued for chair positions. 73 Table 8. GEE regression results for individual expertise cue. DV: Member DV: Chair Model 1 Model 2 Model 3 Model 4 β (s.e.) β (s.e.) β (s.e.) β (s.e.) Active CEO 0.10 (0.04)* 0.09 (0.04)* -0.28 (0.04)** -0.28 (0.04)** Director board tenure -0.31 (0.01)** -0.31 (0.01)** 0.35 (0.02)** 0.35 (0.02)** Regulatory body experience -0.09 (0.11)* -0.08 (0.11) -0.29 (0.12)* -0.30 (0.12)** Board tenure variance -0.01 (0.01) -0.01 (0.01) 0.02 (0.01) 0.02 (0.01) Female representation -0.03 (0.02)+ -0.03 (0.02)+ 0.03 (0.02)+ 0.03 (0.02)+ Board size -0.18 (0.02)** -0.18 (0.02)** -0.38 (0.02)** -0.38 (0.02)** CEO duality 0.02 (0.03) 0.02 (0.03) -0.22 (0.03)** -0.22 (0.02)** CEO gender -0.04 (0.07) -0.04 (0.07) 0.08 (0.06) 0.08 (0.06) Firm size 0.00 (0.02) 0.00 (0.02) -0.10 (0.02)** -0.10 (0.02)** Firm performancet-1 0.03 (0.01)* 0.03 (0.01)** -0.02 (0.01)* -0.03 (0.01)* Industry female employment 0.00 (0.07) 0.00 (0.07) -0.00 (0.06) -0.00 (0.06) Gender 0.32 (0.04)** 0.27 (0.07)** -0.24 (0.04)** -0.17 (0.07)* Demo. similarity -0.03 (0.02)* -0.03 (0.02)* 0.10 (0.02)** 0.09 (0.02)** Demo. heterogeneity -0.03 (0.01)* -0.03 (0.01)* 0.04 (0.01)** 0.04 (0.01)** Expertise cue Operational expertise -0.04 (0.04) -0.08 (0.04)* 0.10 (0.03)** 0.15 (0.04)** Financial expertise -0.15 (0.03)** -0.13 (0.04)** 0.28 (0.03)** 0.27 (0.03)** # of board memberships -0.01 (0.01) -0.00 (0.02) 0.20 (0.01)** 0.19 (0.02)** Elite degree 0.09 (0.03)** 0.09 (0.04)* -0.11 (0.03)** -0.10 (0.03)** 2-way interaction Operational expertise x gender 0.21 (0.08)** -0.22 (0.07)** Financial expertise x gender -0.10 (0.08) 0.06 (0.07) # of board memberships x gender -0.04 (0.04) 0.07 (0.03)* Elite degree x gender -0.01 (0.08) -0.01 (0.08) Intercept 1.46 (0.31)** 1.48 (0.31)** -0.16 (0.32) -0.19 (0.31) Industry dummy YES YES YES YES Year dummy YES YES YES YES Wald χ2 3351.37** 3362.83** 1873.63** 1886.29** Notes: For all model, n = 100,864 director-firm years for 20,468 directors, robust standard errors in parentheses, two-tailed significance tests. + p < 0.10, * p < 0.05, ** p < 0.01 Next, I tested interactions between individual expertise cue indices and gender on a director’s serving committee positions. Past works using status characteristics theory have assumed that the effects of expertise and demographic cues are independent from one another; that is, the effects of expertise cues work the same for targets of any demographic characteristics. However, insights from the role incongruity perspective (Eagly & Karau, 2002) and stereotype 74 content model (e.g., Fiske et al., 2002; Johnson, Stevenson, & Letwin, 2018) suggest that the expertise cue recognition process might not be as simple as status characteristics theorists have assumed. Given that people perceive others based on gendered stereotypes, the same expertise cue might be processed differently based on its congruity with the target individual’s gender. Thus, this dissertation tests interaction effects between individual expertise cues indices and gender on director’s serving committee positions to examine whether and how they show varying interaction patterns. For example, given the notion that women are primarily associated with sociability rather than ability and vice versa for men (e.g., White & Gardner, 2009), it is likely that financial and operational expertise are deemed masculine, and the number of board memberships is viewed as feminine. Indeed, operational and financial expertise cues represent a director’s skills and knowledge of the complex managerial tasks (Krause et al., 2013; Tian et al., 2011), which could be perceived as more masculine than feminine. Moreover, a high number of board memberships signals a director’s broad network within corporate elite circles and is closely related to relation-oriented traits that are more congruent with female gender roles. Doing so may also explain why the results for Hypothesis 3 (i.e., the interaction between the expertise cue as a composite measure and gender) are insignificant. Model 2 displays the interaction coefficients for individual expertise cue indices and a director’s gender. The result revealed that operational expertise cue positively and significantly interacts with a director’s gender (β = 0.21, p < 0.01), indicating that females gain more advantage from having operational expertise than males. Interpreting the average marginal effects suggests that the average change in the probability of a director’s serving committee membership when having operational expertise is 3.3% higher for the female director than for 75 the male director. This pattern of finding does not support the hypothesized relationship for overall expertise cue measure. Figure 5 plots the form of this interaction. Figure 5. Interaction plot of operational expertise and member appointment Model 4 shows the interaction between individual expertise cue indices and gender in a director’s serving chair positions. The coefficient estimate for the interaction between operational expertise and gender is negative and significant (β = -0.22, p < 0.01). Examining the average marginal effects shows that the average change in the probability of a director’s serving chair positions when having operational expertise is 4.8% lower for the female director than for the male director. Figure 6 shows the interaction plots. The coefficient estimates for the interaction between the number of board memberships and gender is positive and significant (β = 0.07, p < 0.05). The average marginal effects shows that the average change in the probability of a director’s serving chair positions when having one more board membership is 1.1% higher for the female director than for the male director. Figure 7 shows the interaction plots. Finally, the 76 interaction coefficients between the other two expertise cue indices and gender are not significant (i.e., financial expertise: β = 0.06, p=0.43, elite degree: β = -0.01, p=0.94). Figure 6. Interaction plot of operational expertise and chair appointment 0.8 Probability of chair appointment 0.7 Male Female 0.6 0.5 Operational expertise Overall, it is noteworthy that the interaction effects between operational expertise and the number of board memberships and gender on committee chair positions showed opposite patters. While a high level of operational expertise cues impedes female directors’ serving chair positions, a greater number of board memberships benefits their serving chair positions. Thus, the insignificant interaction effect of the expertise cue (i.e., Hypothesis 3; a composite variable) could have derived from these two opposing effects canceling each other out when averaged together. One plausible interpretation for these findings pertains to the varying levels of congruity board members may perceive between a director’s gender and his or her expertise cues. Specifically, they may devalue female directors’ expertise, which is thought to be incongruent (i.e., operational expertise), but they may value those that are congruent with female gender roles (i.e., the number of board memberships). Such a possibility informs status 77 characteristics theorists’ current understanding of the expertise recognition process by alluding to nuances associated with perceived congruity between expertise cue indices and gender. Moreover, this also offers an opportunity to rethink the theory about Hypothesis 3 of this dissertation. Figure 7. Interaction plot of board memberships and chair appointment 0.8 Probability of chair appointment 0.7 Male Female 0.6 0.5 Number of board memberships 78 DISCUSSION My dissertation sought to provide a comprehensive understanding of female directors’ attainment of power within boards by exploring its antecedents and outcomes. Previous literature has emphasized female directors’ numerical representation on boards (e.g., Hillman et al., 2007; Mun & Jung, 2018; Post & Byron, 2015; Solal & Snellman, 2019). Underlying this line of research is the assumption that a higher number of female directors represents their ability to exercise more power. The assumption suggests that, in such an environment, female directors are comfortable voicing their insights and making big contributions. However, such an assumption may not be warranted as many boards hire female directors to satisfy the increasing external pressure and may not actively involve these members in various decision-making processes (e.g., Knippen et al., 2019). Moreover, the inconsistent findings on female board representation and its board- and firm-level outcomes raise the question of whether females can truly shape the board decision-making process (Kirsch, 2018). Accordingly, examining the effect of females’ numerical representation is complicated and their true impact within a board might be better understood by capturing the extent of power they hold. This dissertation first examines important task-specific (i.e., expertise cue) and demographic factors (i.e., gender) that would facilitate a director to attain powerful board positions. Then, it investigates how these factors interact and whether any board-level contextual factors may shape the gap differently. My dissertation also explores various outcomes associated with the level of power held by female directors, including their exit and addition and firm performance. 79 Contribution to theory and research This dissertation contributes to past management and finance studies that have shown inconsistent findings concerning female directors’ attainment of power within the board compared with that of males (e.g., female disadvantage: Benton, 2021; Bilimoria & Piderit, 1994; Field et al., 2020; Kesner, 1988, female advantage: Adams & Ferreira, 2009, null: Peterson & Philpot, 2007). Such inconsistencies could have derived from their use of varying operationalizations for director power and expertise and with different time windows. With this in mind, this dissertation strived to offer a comprehensive testing of female and male directors’ attainment of power by using a broader set of measures for director power (e.g., committee member and chair positions) and expertise (e.g., occupational background, number of other board memberships, and educational degree). It also tested hypotheses using the latest dataset (i.e., from 2009 to 2019). As a result, this dissertation unravels interesting nuances associated with female directors’ expertise recognition and power and adds insights into the contemporary status of female directors. For example, one major pattern that emerged from the analyses is diverging results for committee member and chair positions. Examining the main effects of gender reveals that, compared with a male director, a female director is more likely to serve member positions but less likely to serve chair positions. Such findings add insights into research on board gender diversity as impression management practices (e.g., Chang et al., 2019; Hillman et al., 2007; Knippen et al., 2019). This research area has primarily focused on understanding how external stakeholders’ pressures improve women’s numerical representation on boards. Recently, however, these pressures have evolved as stakeholders began to demand for women’s enhanced inclusion (cf. Fucci & Cooper, 2019; Mills, Middleton, Sachar, & Reynolds, 2019). It has 80 become increasingly important to understand whether and how this new type of pressure has led to a different sensemaking and reactions from the boards concerning diversity and inclusion issues. The diverging appointment patterns for committee member and chair positions provide some evidence that firms have made limited efforts to respond to calls for women’s enhanced inclusion. Indeed, committee member positions are relatively less powerful than the chair positions. Such results suggest a possibility that external pressures on women’s enhanced inclusion within boards might have had a limited effect. These results corroborate and extend the view that firms respond to such diversity pressures in a symbolic manner. In addition to examining the antecedents of directors’ attainment of power, this dissertation also aimed to contribute to research on the antecedents of female board representation (e.g., Hillman et al., 2007; Knippen et al., 2019; Mun & Jung, 2018). Related works have primarily focused on identifying external stakeholders’ pressures as a key driver to improve female board representation without paying much attention to internal factors related to boards. Understanding such internal factors is imperative given that research recently began to reveal critical but limited roles of external pressures; boards symbolically conform to these pressures by adding female directors through adding board seats than replacing incumbent directors (Knippen et al., 2019) and not increasing the number of female directors above certain threshold (Chang et al., 2019). Thus, what internally motivates board members to value and appoint female directors has become an important question to consider. This dissertation seeks to respond to such call by highlighting the role of collective power held by female directors and by drawing on insights from research on women helping women in social psychology and organizational theory (e.g., Elvira & Cohen, 2001; McGinn & Milkman, 2012). Furthermore, this dissertation also provides an understanding of “subsequent flows into and out of” female 81 directors that ultimately shape the board gender representation (Lawrence, 1997, p. 87). Past works have predominantly used female board representation—a snapshot measure—as outcome variables. By studying both entry and exit of female directors, this dissertation strive to provide a richer description of how board gender representation may evolve over time. This dissertation also seeks to contribute to status characteristics theory by identifying contextual factors (i.e., demographic configurations of boards) that may impact how board members process the target director’s expertise and demographic cues. Past works using status characteristics theory have focused on examining the impact of an individual’s expertise and demographic cues and his or her probability of attaining powerful positions (e.g., Bunderson, 2003b; Jung et al., 2017). It is imperative to examine such factors because doing so might lend us insights into what might be needed to attenuate female disadvantage in corporate boards. To summarize, this dissertation contributes to theory and literature in three meaningful ways. First, the diverging main effects of gender for committee member and chair positions supports and extends research on firms’ impression management motive and governance practices. The primary implication of this line of work has centered on revealing firms’ limited efforts to increase women’s numerical representation in boards. Given that stakeholders’ demand has begun to revolve around inclusion-related issues, it is important to investigate whether the same symbolic approach occurs during the board decision making. Second, this dissertation contributes to status characteristics theory research by identifying boards’ demographic configurations as contextual factors. Doing so highlights the importance of contingency view of status cues in the board context. Third, by introducing female directors’ power as a potential factor that internally motivates boards to improve female board representation, this dissertation extends the current understanding of antecedents of board gender diversity. Scholars have mostly 82 focused on identifying various types of external pressures that motivate boards’ efforts to improve their gender representation. Limitations and future research directions This dissertation has several limitations that offer opportunities for future research. First, the composite measure used to capture expertise cues was constructed by averaging the four indices. This is different from how the prior works employing status characteristics constructed their expertise cue measures; Bunderson (2003b) conducted a survey from “context experts (e.g., manufacturing/engineering managers, shift supervisors)” to calculate the relative importance of different expertise cue indices and applied these weights when combining these indices. This approach was not available for this dissertation due to limited access to corporate boardrooms. Yet, further delving into a question of how individual expertise cues work could provide an interesting future research opportunity. For example, in my supplemental analyses to understand how the individual indices of expertise cues work differently, I found some interesting patterns that motivate further research avenues. One future research agenda is to identify expertise cues in different categories (e.g., ascribed versus achieved cues; Jung et al., 2017) and see how these cues, based on what they specifically signal, work differently for the female versus the male attainment of power. This can further inform the research on status characteristics theory by unraveling nuances regarding how the different expertise cues might interact with the target individuals’ gender information during the expertise recognition process in boardrooms. Second, in post-hoc analyses to examine the effects of individual expertise cue index, I found that a director’s elite degree is negatively related to his or her serving in chair positions. This could be surprising initially as elite degree has been used as one of key proxies for directors’ prestige and status (Acharya & Pollock, 2013; Benton, 2021; Park & Westphal, 2013). 83 One plausible explanation to such a result could be that, although elite degrees may signify the focal director’s prestige (i.e., being known), they do not provide specific information concerning how he or she can substantively contribute to the board (i.e., being known for something). If that is the case, it can be reasonably argued that elite degree does not function as expertise cue (i.e., an individual’s observable characteristics from which others make inferences of future task performance) and does not facilitate a director’s appointment to chair positions. I argue that such a possibility opens interesting future research opportunities that provide better understanding of how status hierarchy within the corporate elite network forms. As partly shown from the results on elite degree, the credentials are generally valued for directors in general, but might be different for those in key leadership positions of the board. This could also drive board decision making differently than what is commonly thought. Third, although the interaction coefficient between a director’s expertise cues and gender was not supported, the post-hoc analyses showed an interesting pattern that could have caused this insignificant finding. from the supplemental analyses that different expertise cues may interact differently with a director’s gender. The results of post-hoc analyses suggested that female directors are disadvantaged from serving committee chair positions when they have operational expertise but are advantaged when they have a higher number of directorships. Such findings show the possibility of adding insights into status characteristics theory, which has fallen short of understanding interactions between different types of expertise and demographic cues (e.g., Bunderson, 2003b; Jung et al., 2017). The results of the supplemental analyses suggest that more nuances should be considered in regard to the expertise recognition process by integrating insights from the role congruity perspective (e.g., Eagly & Karau, 1992). This also shows an opportunity to further reshape theorizing of Hypothesis 3. 84 Fourth, while my dissertation theorizes the role of boards’ demographic configurations in shaping board members’ recognition of others’ competences, none of these received empirical support. Such a result could have been driven by the highly limited number of racial minorities on the board. In my data, 89.1% of the directors are White, 5.6% are African American, 3.2% are Asian, Middle Eastern and Native American, and 2.1% are Hispanic. Given this racial distribution, the two composite measures of demographic configurations in terms of age and race are highly restricted in range and do not accurately capture the phenomenon of interest (i.e., various configurations of multiple demographic categories within the board). Yet, I believe there are numerous other factors that scholars can explore to help understand what narrows the gap. For example, board members’ personal experiences and values (e.g., prior experiences of working with female colleagues, political orientations) or boards’ interactional patterns (e.g., frequency of board meetings, leadership of board chairs) could facilitate female directors’ attainment of power on boards; I believe delving into these opportunities would bring meaningful insights for practitioners to help them foster substantively diverse and inclusive board climates. Fifth, the hypotheses on female representation in powerful board positions and subsequent improvement in female board representation are not supported. I suggest that increased female representation in powerful board positions creates an environment that is inclusive of female members. As a result, incumbent female turnover decreases, whereas boards’ selection of females increases. The results do not support the hypotheses and are largely inconsistent with a body of knowledge that has suggested a women-helping other-women mechanism; a large female presence in the upper ranks has been shown to help females in the lower ranks to succeed (e.g., wage inequality: Cohen & Huffman, 2007; turnover: Elvira & 85 Cohen, 2001; Sacco & Schmitt, 2005; career mentoring: Rocha & Praag, 2020). Understanding which factors—particularly the ones in the board context—cause such different findings would be interesting; doing so would inform our understanding as to what are the contextual factors that facilitate females in elite corporate positions help other women. Another possible research agenda is to examine how female representation in powerful board positions shapes overall interactions within a board. Do male directors perceive a higher identity threat when many female directors assume powerful positions? (e.g., Chattopadhyay et al., 2004; Konrad, Kramer, & Erkut, 2008). Assuming that female directors have high levels of communal traits, would involving more females in powerful positions help nurture a collaborative climate within boardrooms? (e.g., Huse & Solberg, 2006). One interesting piece of evidence, although it was not a part of the research model, can be found in the survival analysis result for director exits. Female representation in committee positions is associated with the lower likelihood of director exits, both male and female (see Table 4; β = 0.23, p < 0.10 for female representation in committee member positions and β = 0.54, p < 0.10 for female representation in chair positions). Although the effects are somewhat weak, these results could imply that female chairs’ communal leadership mitigates conflicts among board members (Post, 2015). I believe future research should delve further into how female directors in powerful positions shape the culture within a board. Sixth, like many other similar works on the performance implications of female representation in the upper echelons of organizations, this dissertation was unable to measure and test the mechanisms that could have caused the insignificant relationship between female representation in committee positions and firm performance. As previously noted, the benefits of divergent insights that females in committee positions bring may have been overshadowed by 86 heightened gender-based conflicts, especially those pitted against females in male-typed committees. It is also possible that higher female representation in committee positions may not necessarily increase psychological safety among female directors, preventing them from expressing divergent insights. Future research can better disentangle such potential mechanisms by examining more localized measures of performance and gender-based committee assignment practices. At the board level, it is possible to examine how the appointment of females in committee positions impacts a more localized performance measure, specifically concerning how the board operates. For example, higher female representation in committee positions could change the makeup of various board committees (cf. Dixon-Fowler, Ellstrand, & Johnson, 2017; Faleye et al., 2011) and board members’ multi-committee assignments (cf. Gai et al., 2021). At the committee level, it would be interesting to examine whether gender-based assignments occur and how such patterns shape committee-level outcomes differently. Given an assumption that the four committees (e.g., audit, compensation, corporate governance, and nomination) have different levels of masculine or feminine images, directors are likely to be assigned to these committees based on their gender. Furthermore, such an assignment pattern is likely to change decision-making processes differently across the four committees. For example, not only male- typed committees tend to have less female representation, but also their decision-making patterns tend to change less even when female representation increases. Given that how boards operate could shape their long-term effectiveness, this could spark an interesting discussion among corporate governance scholars on how board functionality is affected by their gender representation (cf. Boivie, Withers, Graffin, & Corely, 2021). 87 CONCLUSION As societal demands for promoting social justice in the higher levels of organizations escalate, the number of females in the boardroom has gradually increased in recent decades. However, such an improvement seems to be mostly driven by firms’ symbolic reactions to outside pressures, rather than by their active attempts to foster diverse and inclusive boards. It seems that this trend inadvertently limits the presence of female members on boards—then, how do we break this cycle? From this vantage point, my dissertation delves into the question of whether and how boards can become inclusive of female directors. Specifically, it examines whether female directors—with similar levels of expertise cues as males—have attained powerful board positions and how various demographic configurations of a board shape the board members’ expertise recognition and reduce the leadership gaps between males and females. It also examines whether the overall level of power held by females may work as an internal driver to improve female board representation and firm performance. Overall, my dissertation underscores the role of the power attainment of female directors as a key factor to making boards more diverse. I hope my dissertation spurs further discussion on how boards can make substantive investments to develop diverse and inclusive climates. 88 REFERENCES 89 REFERENCES Abdullah, S. N., Ismail, K. N. I. K., & Nachum, L. 2016. Does having women on boards create value? The impact of societal perceptions and corporate governance in emerging markets. Strategic Management Journal, 37(3): 466-476. Acharya, A. 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