The study unveiled a concerning pattern: significant external upheavals like the 2008 Global Financial Crisis (GFC) instigated a notable decline in the representation of women in boardroom positions. This decrease wasn’t confined to particular board roles or industries; instead, it affected companies across the spectrum of financial performance. Moreover, the research indicates that even strong leadership from female CEOs or pre-existing institutional endeavours aimed at fostering gender diversity, such as quotas, proved ineffective in mitigating this decline during periods of crisis.

Sorin Krammer, Professor of Strategy and International Business and the corresponding author of the study from the University of Surrey, articulated: “Our findings underscore the vulnerability of the progress achieved towards gender diversity on boards when businesses encounter significant crises. Companies often pivot towards short-term survival, sidelining diversity initiatives during such times.

While female leadership plays a pivotal role in advancing gender equality, our results indicate that female CEOs, despite the challenges, continue to strive and make significant contributions to safeguard diversity efforts amidst extreme turbulence. Similarly, established initiatives like gender quotas or corporate governance codes lack the resilience to counteract the adverse impacts of major disruptions on gender diversity within top management teams.

The research urgently advocates for companies to formulate enduring diversity strategies resilient to unforeseen major challenges. Researchers propose that policymakers concentrate on fortifying institutional frameworks to foster and enforce gender diversity on boards. Further investigation is warranted to ascertain whether specific conditions or factors could alleviate the negative repercussions of crises on gender diversity.

Professor Krammer remarked, “These findings underscore the necessity for companies to devise long-term diversity strategies capable of withstanding unforeseen challenges. Additionally, policymakers must ensure that existing institutional frameworks are adaptable to withstand such external shocks and continue to drive progress towards gender diversity on boards even in the aftermath of major disruptions.”

More information: Shibashish Mukherjee et al, When the going gets tough: Board gender diversity in the wake of a major crisis, The Leadership Quarterly. DOI: 10.1016/j.leaqua.2024.101784

Journal information: The Leadership Quarterly Provided by University Of Surrey