Social Capital of Women Directors and Financial Performance of a Company: Empirical Study

Abstract

In modern practice of corporate governance while discussing the structure of board of directors one of the most topical issues is devoted to gender diversity and appointing women on BD. The differences in the results about the relationship between a share of women in boards and financial performance indicators obtained by previous researchers can be explained not only by the quantity of women on BD, but rather by their quality. In particular, by intellectual capital that is generated by women members of BD. The aim of the paper is to define the role of social capital of women on BD in enhancing companies' financial performance indicators. We measure social capital of women on BD with the help of their multiple positions on other BD. Based on dynamic approach to social capital we conduct an empirical research on a sample of publicly listed Russian companies for a period from 2002 to 2010 and define the differences in human and social capital of women on board of directors. The obtained results help to come to the conclusion that multiple directorship positions held by women directors for a long period of time aggregate and accumulate specific professional knowledge, skills and experience that enhance value creation in a company. At the conclusions part of the paper we discuss our findings and and outline main directions for further research.