Balancing a See-Saw in the C-Suite: Female Directors Targeting Male CEOs Economic Status

Abstract

Little has been explored on how the subdivision of status for gender has an influence in actors behavioral decision-making. The present study addresses the need to subdivide status for female directors and male CEOs in order to better investigate the formers decision-making toward the latter. By drawing on social identity and social comparison theory, female directors try to formulate a balance with male CEOs. Female directors enjoy high economic status, whereas they occupy low social status compared to male CEOs. In contrast, male CEOs enjoy high economic and social status. Thus, status-inconsistent female directors aim to balance their overall status with male CEOs through targeting the latters economic status. By utilizing S&P 1500 firms from 2007 to 2016, as females in the boardroom increases, male CEOs salary growth rate decreased. This influence was strengthened as female directors hold more board appointments at other firms, and it was only salient in male-dominated industries where gender inequality is high, and none of the effect was significant toward female CEOs. The findings suggest that enhancing gender equality in an organization will promote legitimacy in decision-making by preventing ones subjectivity from intervening.