Like attracts like

Efforts to increase gender diversity on corporate boards have often been justified on grounds of fairness and representation. Research in the International Journal of Corporate Governance suggests that the presence of women in supervisory roles may also shape how companies are run, influencing both who becomes a top executive and how closely senior leaders are monitored.

The study examined publicly listed German companies during a period when political pressure to increase female representation in corporate leadership was high on the agenda. Germany formally introduced a gender quota in 2016 requiring large listed companies to ensure that at least 30 per cent of supervisory board members are women. This led to a significant increase in female representation on supervisory boards by the end of the decade. Yet, say the researchers, women were not as well represented on management boards. A mere one per cent of executive roles were held by women in the mid-2000s, and that figure had only risen to about 10 per cent by 2019.

To understand how female representation influences corporate leadership, the study analysed almost 100 publicly listed firms subject to codetermination rules. It focused on two outcomes: the composition of management boards, particularly the presence of female executives, and executive turnover, the rate at which top leaders leave their positions. The analysis focused on chief executive officers (CEOs), chief financial officers (CFOs), and chief human resources officers (CHRO).

The study used a statistical method known as an instrumental variable approach to address a common difficulty in this kind of research, endogeneity. Endogeneity arises when cause and effect are intertwined. For example, firms that are already committed to diversity may appoint more female supervisors and promote more women to executive roles, making it difficult to determine whether one caused the other. By using earlier levels of female representation as a statistical instrument, the analysis could isolate the causal impact of women serving on supervisory boards.

The results suggest that the influence of female supervisors depends less on their overall numbers than on where they sit within the governance structure. Women serving as shareholder representatives on the remuneration and personnel committee significantly increase the proportion of women on management boards. Because this committee prepares decisions about executive appointments, membership provides direct influence over who joins the leadership team.

This pattern is consistent with a concept in social science known as the similarity attraction paradigm, like attracts like, if you will. The theory holds that individuals often favour colleagues who resemble themselves, whether in background, experience or identity. Applied to corporate boards, it suggests that female supervisors may be more likely to support female candidates for executive roles, particularly when they have direct authority over appointments.

Carow, J. (2026) ‘The effect of female supervisors on the structure and dynamics of the management board‘, Int. J. Corporate Governance, Vol. 16, No. 1, pp.1-37.