Category: Uncategorised

How important is the structure of the connections between firms to achieve more gender representation in corporate boards? In this upcoming paper, Raddant and Karimi create a model that tests, based on the influence of homophily on the selection of new board members, the time it will take boards to achieve parity assuming some different starting scenarios on women participation.

The results show that it is important not only to promote more women in all the boards, but that the centrality of the ones that incorporate women matters. Moreover, procuring that larger firms adopt diversity is a way to take advantage of the homophilic structural behavior of the network. In other words, parity can be achieved faster if more central firms have women in their boards and they are not relegated to smaller firms with less connections.

Diversity in leadership positions, including corporate boards, is an important aspect of equality. It is important because it is the key to better decision making and innovation and, above all, it paves the way for future generations to participate and shape our society. Many studies emphasize the importance of visibility of role models and the effect that connectivity has on the success of minorities in leadership. However, the connectivity of firms, the dynamics of the adoption of minorities into leadership positions, and the long-term effects in terms of group dynamics and visibility are not well understood.

Here, we present an empirically informed model that illustrates these effects for the appointment decisions on corporate boards. We show how biases in the initial placement of minorities, as well as homophily in the appointment of future board members, influence the visibility of minorities over time. We show that homophily – the appointment of minorities is influenced by the presence of minorities in a board and its neighboring entities – is an important effect shaping the trajectory towards equality. We also show how the feedback related to the visibility of minority members influences the dynamics. We find that reaching equality can be sped up or slowed down depending on the distribution of minorities in central firms. These insights have significant implications for policy-making geared towards fostering equality and diversity within corporate boards.