Major economic crises negatively impact gender diversity on boards, reveals new research.

The study, conducted by Shibashish Mukherjee, Professor of Corporate Finance at emlyon business school, and Sorin M.S. Krammer at Surrey Business School, investigated corporate boards before and after the 2008-2010 financial crises.

They found a robust decline in gender diversity on corporate boards after the crisis, irrespective of board positions, expertise, and firm performance. The study found that junior female executives faced removals from boards, even if they had specialized appointments, such as the CFO.

“In times of crises, firms are forced to prioritise saliency and legitimacy differently than in ‘normal’ times. In turn, this shifts corporate focus away from ‘softer’ issues such as gender diversity to navigating the crisis as robustly as possible,” says Professor Shibashish Mukherjee.

The researcher also looked into whether having a female leader, such as a female CEO, or the existence of gender-specific affirmative policies, such as board gender quotas, could have mitigated the negative effect of the crisis. The study shows that both factors did not stop a company from reducing its gender diversity on the boards.

“These results provide interesting insights as female leadership would suggest some movement towards equality for women, who face considerable challenges climbing the corporate ladder. Yet, in times of crises the focus on gender equality, even for a female CEO, drops down significantly,” says Professor Shibashish Mukherjee.

The researchers analysed over 10 thousand corporate boards in 21 countries, employing a method known as a “natural experiment” that compares board gender diversity before and after the global financial crisis.

*Research by emlyon business school. The study was published in the academic journal The Leadership Quarterly