We show that systematic differences in the credentials and roles of female versus male multi-board directors determine what governance priorities flow through interlock connections. Using an instrumental variable approach exploiting state-industry-year director supply variation, and event study estimates exploiting California’s 2018 board gender quota as an identifying shock, we document that the quota altered the selection of female directors into the multi-board network, shifting the priorities transmitted through their interlock connections. Post-quota female multi-board directors are selected on financial credentials and allocated to audit roles, transmitting financial oversight priorities rather than stakeholder orientation, explaining why female interlocks are associated with deteriorating environmental and social (ES) performance, while male interlocks, whose broader interdisciplinary backgrounds support positive ES transmission, exhibit the opposite pattern. Effects are strongest for health and safety, the ES outcome most dependent on active board-level oversight and therefore most sensitive to changes in director composition and role allocation.
Presented at the 36th Australasian Finance and Banking Conference, the International Corporate Governance Society Conference (ICGS23), the Women and Finance Université Paris 1 Sorbonne, the Research Symposium in Finance and Economics 2023, the FMCG23 conference, the 16th Financial Risks International Forum, French Inter Business School Workshop in Finance
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4260457
(solo authored paper)
Older versions of this article have been previously circulated with the title “Overboarded”.
Annalisa Tonetto 