The Role of Women on Board for Innovation: Lessons from the High-tech Companies

Abstract

Building on previous research on gender diversity in corporate governance, the article empirically examines the implications of women on board for the company commitment to innovation by focusing on the presence, the critical mass and the human capital diversity of female directors. To this purpose, it relies on a unique dataset of Italian companies belonging to the high-tech industry as this context is considered male-dominated. Findings document that female directors positively affect the company commitment to innovation only when boards are characterized by a critical mass of women. Moreover, the analyses show that the human capital diversity of female directors enhances the firm commitment to innovation. Thereby, the study offers contributions to both scholars and practitioners. Indeed, it fuels the debate on the role played by women on board and emphasizes the importance of fostering the appointment of female directors, especially as critical mass. In addition, it highlights that the critical mass of female directors can exploit the benefits of gender diversity as it limits the emerging conflicts within the boardroom as well as hampers the risk-aversion, the skill underestimation and the sense of inferiority that is typical of women on board in masculine industries. Finally, the research emphasizes the relevance of mixing the diverse educational/professional backgrounds of female directors to foster the development of new ideas and improve the cross-functional discussions among board members to the benefit of company innovation.