AOM 2021: What motivates companies to set a female quota of 0%?
What happens if you let companies set their own targets for female representation? And what factors determine how companies set their gender target?
Our PhD student Luise Penter represented the Chair of International Management at this year’s virtual AOM conference. The Academy of Management (AOM) Conference is the largest gathering of management scholars from around the world. Themed “Bringing the manager back in management”, the 81st annual meeting offered a great opportunity to interact with global peers and discuss current issues - such as the research topic of Luise. In her research project, she investigates the signaling effect of voluntary gender targets on the executive boards of German companies.
Aspirational Target: 0% Female Directors
A short recap: Since 2015, all public and co-determined German companies are required to set and report a voluntary “Flexiquote”, an aspirational target concerning the gender distribution in their executive boards. In the absence of sanctions, a substantial share of firms reported 0% as their target ambition for female representation. Meanwhile, executive board female representation has only increased marginally, forcing the discussion on regulatory intervention into a next round.
The research project aims to identify the underlying motivations and antecedents that drive the target ambition set by companies. Based on a data set including 287 German firms, the analysis shows that firm size, prior female representation on the executive board, executive board size and female representation on the supervisory board predict a company’s target-setting. Put differently, whether companies set non-zero targets or not largely depends on the already existing female representation within the firm and firm’s visibility and hence exposure to public scrutiny.
If this topic has caught your interest, check out Luise’s and other researchers’ work on gender diversity discussed at AOM 2021 here.
Also, click here to find out what other research projects our PhD students have just recently presented at the EURAM conference 2021.