Female directors as screening cues: Representation, role, and status in relation to gender diversity in lower managerial levels

Abstract This study examines how firm’s female directors are associated with the representation of women in lower managerial levels (“representation (L)”) through three board-level characteristics: board gender representation (the proportion of women on boards; “representation (D)”, referring to the director level); role (the proportion of inside directors among female directors); and status (female CEO or chair). Building upon the screening theory and cue consistency theory, we examine whether these board-level characteristics operate as largely effective screening cues of an organization’s commitment to gender equity. Using panel data on Japanese publicly listed firms from 2010 to 2022 and fractional logit models, we estimate direct and interactive patterns with representation (L), evaluating average marginal effects and their contrasts on the probability scale. We find that representation (D) and role are positively associated with representation (L), while status shows no direct association. Regarding interactions, the interaction between representation (D) and role is positive and statistically significant, indicating that alignment within the same cue source (intra-source cue consistency) is associated with a stronger association between representation (D) and representation (L). By contrast, although the coefficient for the interaction between representation (D) and status is positive, slope differences based on average marginal effects are imprecise and include zero; the interaction between role and status and the three-way interaction are likewise indistinguishable from zero. By clarifying when and how female board members operate as cues—and showing that aligned representation and role cues are more predictive than status is—this study extends screening theory and specifies boundary conditions for cue consistency.