Organization-Level Drivers for Gender Diversity in Management: Empirical Evidence from BRICS Nations
By Michael Pusic
Abstract: This paper examines the firm-level determinants of the percentage of managers who are women, using data from Brazil, Russia, India, China, and South Africa (BRICS). Using unbalanced panel data for 437 firms in BRICS nations from 2012-2018, I study the effect of a firm’s industry, size, age, and its percentage of female directors and employees on its share of female managers, while controlling for firm profitability, financial risk, and state ownership. The results show firms in the financial and consumer discretionary sectors have the highest proportion of women in management, while those in the energy, utilities, and materials sectors have the lowest shares. The results also indicate that for all but the smallest firms, increases in firm size are associated with a decrease in the share of female managers. They suggest a positive correlation between the share of female employees and managers, though the directionality of this relationship is not wholly confined by the data. Finally, the results reveal that the effect of having at least one woman on the board of directors on the share of female managers depends on firm age and potentially size.
Introduction
For decades, the low representation of women in corporate management has been confronted by researchers, policymakers, and investors. Research found countless benefits of female management, including diversity of ideas and stronger communication (Milliken and Martins, 1995), novel leadership styles (Rosener, 1990), decreased firm risk (Carter et al. 2003), and in certain situations, overall increased firm value (Davidson & Burke, 2000). Policymakers in nations such as France, Norway, and Iceland have mandated female representation on boards of directors, and the UK and Canada have moved closer to such legislation (Saeed et al. 2016). Finally, investors have shown an increased interest in supporting female-led companies (La Roche, 2018). But despite this, the glass ceiling has remained largely intact — women still hold only a quarter of top management positions globally (Pinsker, 2014). Given this mounting pressure for gender diversity and only marginal progress, the question follows: What leads to higher levels of female representation in management?
