Shared parental leave, male board directors, and firm performance: A corporate governance perspective

To explore a broader dimension of board gender diversification, we investigate whether increased gender-equal government policy in relation to shared parental leave (SPL) affects the governance behavior of male board directors. We analyze the influence of the 2015 UK SPL policy using data on 1930 UK firms and semi-structured interviews with board directors. Consistent with social influence theory, we observe changes in male directors’ governance decisions after SPL. Attributable to better corporate governance, financial performance improves in firms with predominantly male boards. Director interviews reveal increased board level focus on gender equality and SPL, often facilitated by considerate, yet powerful, male directors. Broadening research on corporate governance and gender, our study suggests the positive influence of increased commitment to gender equality on the corporate governance behavior of the predominant cohort of male directors. For board gender diversity to contribute to meaningful performance improvements diversity must be embedded at deep organizational levels, and women directors must be granted sufficient power to effect strategic change. Governments need to ensure gender egalitarian policies foster structural equality and encourage fathers to take parental leave. In addition to focusing on gender representation targets, firms must address boardroom gender power imbalance.