Prior research has shown that high-status firms enjoy multiple benefits such as access to information and resources. Attaining high status is imperative for firms to mitigate uncertainty and enhance the prospects of success. The increasing presence of female directors on corporate boards in recent years has led researchers to study their impact on the status of firms. However, research is still limited on the impact that the social capital of female directors has on the status of the firms they serve. This study focuses on the role of social capital and networks in examining the impact of female directors on the status of firms. Using the S&P 1500 index firms over 15 years, this study uses social network theory to explore the relationship between female directors and firm status. We fin...[ Read more ]

Prior research has shown that high-status firms enjoy multiple benefits such as access to information and resources. Attaining high status is imperative for firms to mitigate uncertainty and enhance the prospects of success. The increasing presence of female directors on corporate boards in recent years has led researchers to study their impact on the status of firms. However, research is still limited on the impact that the social capital of female directors has on the status of the firms they serve. This study focuses on the role of social capital and networks in examining the impact of female directors on the status of firms. Using the S&P 1500 index firms over 15 years, this study uses social network theory to explore the relationship between female directors and firm status. We find an inverted U-shaped association between female directors and firm status. We further show that the associaltion is moderated when the female directors are present on critical committees (audit and compensation), such that firms with female directors on critical committees will have higher status when compared to firms without female directors on critical committees.

Keywords: Women on Board, social network theory, board Interlocks, inverted U-shape relationship