Illusion of Inclusion: Examining Trickle-Down Effects of the Board Gender Quota Regulation in India

Abstract

In this study, I explore the consequences of the board gender quota in India, the first developing country to implement such a policy. Proponents of board gender quotas argue that such policies ought to undo the gendered organization by bolstering up appointments of women in lower ranks, starting with senior executive ranks just below the board (i.e., positive trickle-down effects). Challenging these normative arguments, I argue that deeply rooted gender structures in organizations, coupled with the nature of the board gender quota in India, may hinder such effects. After analyzing 184 of the largest publicly listed firms in India during 2007–2017, I found that the board gender quota led to an increase in the appointment of women to corporate boards, with a smaller positive effect for boards with higher numbers of female directors before the quota. However, firms reduced appointments of women to senior executive ranks below the board after the announcement of the regulation. Hence, it seems that women’s access to board positions through a quota resulted in redoing the gendered organization by reducing female appointments at senior executive levels.