Social capital and board gender diversity

Mansoor Afzali*, Hanna Silvola, Siri Terjesen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

14 Citations (Scopus)


Research question/issue
This study explores the relationship between the level of social capital in the location of a firm's headquarter and the presence of female board directors. We measure local social capital by civic norms (i.e., voter turnout and census participation) and density of social networks (i.e., community, professional, church, and sports). We hypothesize that greater levels of local social capital will increase the share of female directors on local firms' boards, including women attaining a critical mass presence as well as member and chair roles on the board's audit, compensation, and nomination committees.
Research findings/insights
Using 53,671 observations from U.S. public companies from 2000 to 2018, we find that firms headquartered in counties with higher levels of social capital have higher percentages of women directors. The results are robust to the inclusion of local female labor participation rate, religiosity, and other county-level demographics as well as instrumental variable and propensity score matching models. We also find that female directors in firms located in high social capital counties are more likely to achieve a critical mass; attain membership of audit, compensation, and/or nomination committees; and serve as chair of audit and nomination committees than female directors in firms located in low social capital counties. A robustness check with an international sample reveals similar results.
Theoretical/academic implications
We build on institutional theory to highlight that the informal institution of social capital, in the form of U.S. county-level civic norms and social networks, shapes gender composition of local firms' boards. We build institutional theory at two levels of the quest for “fit” to the environment: firms seeking “fit” by creating more leadership opportunities for women, and individuals pursuing “fit” by moving up in corporate careers. We outline theoretical mechanisms including underlying informal societal norms of greater trust, tolerance for gender equality, respect for civil liberties, cooperative and helpful behavior, transparency, external monitoring, and less discrimination and information asymmetry.
Practitioner/policy implications
Our findings offer insights to policymakers and practitioners interested in how local social capital shapes firm and individual actions. Our policy-related findings suggest that communities with greater civic norms are characterized by greater individual commitment to and trust in communities, equality, helpful behavior, and external monitoring, and less cynicism, and this context enables women to reach corporations' highest echelons. To maximize career prospects, women can attain leadership and other skills through local societal associations and build and strengthen ties in counties with higher levels of social capital. Firms should actively support community associations and direct philanthropy towards building social fabric in local communities.
Original languageEnglish
Peer-reviewed scientific journalCorporate Governance: An International Review
Issue number4
Pages (from-to)461-481
Publication statusPublished - 22.11.2021
MoE publication typeA1 Journal article - refereed


  • 512 Business and Management
  • board gender diversity
  • civic norms
  • corporate governance
  • critical mass
  • institutional theory
  • social capital
  • social networks

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Financial management, accounting, and governance


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