Regulation, the trickle-down effect, disclosure, and board gender diversity

Abstract

The first paper of this thesis (Chapter 1) provides evidence demonstrating how the trickle‐down effect is influenced by the introduction of regulation on board gender diversity. In 2011, a new soft law regulation was suddenly introduced for firms listed on the United Kingdom’s FTSE 350 index, the regulatory intervention put forward recommendations to increase the representation of women on the boards of FTSE 350 listed firms. There is evidence of a positive relationship between women on boards and women’s representation in senior management during the pre‐regulation era – referred to as the trickle‐down effect. However, the introduction of regulation had the unintended consequence of weakening the relationship between women on boards and women in senior management.

The second paper of this thesis (Chapter 2) explores the relationship between women on boards and the likelihood of a firm disclosing information on board gender diversity. This paper uses the United Kingdom as its research setting, a national context in which a ‘comply or explain’ principle was introduced to encourage firms to provide disclosures on board gender diversity. Evidence is found suggesting a positive relationship between women’s representation in the boardroom and disclosures on board gender diversity. Furthermore, this positive effect is most prominent when there is a critical mass of women (i.e., three or more women) at board level. Further analyses establish the robustness of this effect.

The final paper of this thesis (Chapter 3) leverages advances in natural language processing to provide a new methodology to assist researchers wanting to inductively analyse large volumes of gender diversity disclosures. Specifically, this paper illustrated the application of topic modelling applied to a large database of diversity statements retrieved from the websites of listed firms – whilst also providing a guide outlining each stage of the topic modelling process for researchers.