Role of the Board in Ceo Succession : Do Female Board Members Favor Female Candidates?
Heikkinen, Tiina (2024)
2024
Kauppatieteiden maisteriohjelma - Master's Programme in Business Studies
Johtamisen ja talouden tiedekunta - Faculty of Management and Business
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Hyväksymispäivämäärä
2024-05-16
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tuni-202405135788
https://urn.fi/URN:NBN:fi:tuni-202405135788
Tiivistelmä
In this thesis, I examine the following question: does the share of females in the board of directors affect the likelihood of a female CEO being appointed? Women are still underrepresented in the firms’ upper echelons. This raises a question, what can be done to increase the number of competent female candidates in CEO positions and what kind of circumstances affect females rising to become CEOs. This thesis seeks to explore this understudied field of female CEOs. I focus my at-tention on the members of the firms’ boards and what factors in the firms’ boards affect whether a woman is chosen as CEO.
Drawing from social identity theory I argue that board members are more willing to appoint a CEO that resembles them and with whom they can identify themselves (Hypothesis 1) – gender being the most obvious dimension of resemblance. The exposure argument states that men who are exposed to female leaders, e.g., as a fellow board member, are also more willing to appoint a female CEO. In this thesis I also test, if larger companies are more likely to appoint a female CEO (Hypothesis 2) – the argument being that they may experience more intense social pressure to promote female lead-ers and thus contribute to society-wide gender equality. I test these hypotheses by analyzing CEO succession of Finnish companies in two time windows, 2003–2008 and 2008–2013.
The findings indicate that the share of females in the board of directors does indeed increase the likelihood of a female CEO appointment by 26 to 29 percent and Hypothesis 1 is thus confirmed. However, the result demonstrate that larger companies are not more likely to appoint a female CEO and Hypothesis 2 is thus rejected. The findings suggest that one way to increase the number of women as CEOs is to diversify the gender composition of the board of directors.
Drawing from social identity theory I argue that board members are more willing to appoint a CEO that resembles them and with whom they can identify themselves (Hypothesis 1) – gender being the most obvious dimension of resemblance. The exposure argument states that men who are exposed to female leaders, e.g., as a fellow board member, are also more willing to appoint a female CEO. In this thesis I also test, if larger companies are more likely to appoint a female CEO (Hypothesis 2) – the argument being that they may experience more intense social pressure to promote female lead-ers and thus contribute to society-wide gender equality. I test these hypotheses by analyzing CEO succession of Finnish companies in two time windows, 2003–2008 and 2008–2013.
The findings indicate that the share of females in the board of directors does indeed increase the likelihood of a female CEO appointment by 26 to 29 percent and Hypothesis 1 is thus confirmed. However, the result demonstrate that larger companies are not more likely to appoint a female CEO and Hypothesis 2 is thus rejected. The findings suggest that one way to increase the number of women as CEOs is to diversify the gender composition of the board of directors.