Female Representation on Corporate Boards in Europe: The Interplay of Organizational Social Consciousness and Institutions

We examine the role of alignment between organizational social consciousness and the informal and formal institutions of a country in increasing female representation on boards. Using fixed-effects and Hausman Taylor regression methodology for endogenous covariate with panel data for the years 2006–2020, we find that the greater the alignment between organizational social consciousness and certain formal (i.e., a gender quota) and informal (i.e., high gender equality) institutions, the more progress there is toward gender representation on corporate boards in Europe. We also find that more socially conscious firms make the most progress, often going beyond the minimum regulatory targets. By showing the complementarity of these factors, we address the enduring question of how the interplay of formal and informal institutions directly affects corporate behavior, thus contributing to the institutional, public policy/regulatory, and corporate governance literatures. We note the need for policymakers to go beyond mere codification of rules via quotas and simultaneously work toward raising national and organizational social consciousness levels on issues of gender equality.