Women in the boardroom: a bottom–up approach to the trickle-down effect

This paper argues that role modeling can explain the impact of boardroom gender diversity on corporate performance. It theorizes female workers are boosted by leadership, gain increased motivation, and achieve greater productivity, thereby making their directors more effective. We test this bottom–up approach to trickle-down hypothesis data hand-collected among local cooperatives providing microcredit in Senegal. All organizations surveyed similar small, which allows us use a homogenous performance metric. them outsource human resource management same third party, mitigates risk endogeneity. The cover over 100,000 triads composed dominance board, CEO, credit officer. A better financial is achieved when triad gender-uniform—be it male or female—confirming importance suggesting board members depends composition workforce. Plain English summary Women’s leadership styles differ from men’s. But we still ignore whether adopted make any difference terms Scholars hold controversial views about how firms boardroom. article speculates act as models subordinates (“trickle-down effect”) “bottom–up” sense motivation working under leadership. These enabled observe unlikely situation boards including 50% women. measured with loan repayment. Our results confirm female-dominated they work CEOs subordinates. principal implication