Female board membership and stakeholder strategy: Consistency under complexity and uncertainty

Abstract

How does female board membership affect firm stakeholder strategy? With the large increase in pressure to add more women to boards, it is especially important to understand how they influence firm strategy. Moreover, despite the growing importance of firm stakeholder strategy, key stakeholders continue to criticize firms for failing to keep their commitments. Here, we expect that owing to their long-term nature, consistency is particularly important for stakeholder investments, and that owing to their greater interest in stakeholder issues and their effect on board monitoring, female board members can be a key driver of stakeholder strategy consistency. Specifically, we develop and test hypotheses that increasing architectural complexity and uncertainty make stakeholder investments more difficult or costly, leading to a reduction in such investments. However, female board membership increases firm stakeholder consistency and counteracts these negative effects. Using a sample of 1755 S&P 1500 firms for the period 2000–2013, we provide robust support for our hypotheses.