chapter  1
34 Pages

Corporate Governance Theories: A Synthesis

ByMaria Aluchna

This chapter describes a theoretical framework that can be used to understand the impact of board gender diversity on board effectiveness and firm performance. It highlights four key theories: agency theory, resource dependency theory, gender role theory and upper echelons theory. The chapter reviews the arguments in the corporate governance literature for greater female boardroom representation. It deals with the ethical case and it considers the business case. The former is concerned with the principle that there should be no discrimination in the workplace, while the latter focuses on the benefits that women bring to the boardroom by drawing from a broader talent pool of directors. The chapter reviews the possible costs associated with an increase in the gender balance of boards. It concludes with an evaluation of the evidence, both positive and negative, concerning the effectiveness of greater female boardroom participation in improving business performance.