European Management Journal (2008) 26, 48– 58

journal homepage: www.elsevier.com/locate/emj

Newly appointed directors in the boardroom:

How do women and men differ?
a,1 b,*,à c,1
Val Singh , Siri Terjesen , Susan Vinnicombe

a
Reader in Corporate Diversity Management, Cranfield School of Management, Cranfield University,
Bedford MK43 0AL, United Kingdom
b
Senior Lecturer, Queensland University of Technology, Brisbane QLD 4001, Australia; Assistant Professor, Texas Christian
University, Ft. Worth, TX 76129 USA
c
Professor of Organizational Behaviour and Diversity Management, Cranfield School of Management,
Cranfield University, Bedford MK43 0AL, United Kingdom

KEYWORDS Summary This paper investigates the human capital profile of new appointees to corpo-
Careers; rate boards, exploring gender differences in education, profile and career experiences.
Corporate boards; Findings from a study of UK boards reveal that women are significantly more likely to bring
Corporate governance; international diversity to their boards and to possess an MBA degree. New male directors
Diversity; are significantly more likely to have corporate board experience, including CEO/COO
Female directors; roles, while new female appointees are significantly more likely to have experience as
FTSE 100; directors on boards of smaller firms. Our evidence contradicts the view reported by some
Gender; chairmen that women lack adequate human capital for boardroom positions.
Glass ceiling; ª 2007 Elsevier Ltd. All rights reserved.
Human capital;
Top management teams

Introduction key issue in corporate governance is the gender composition

of corporate boards, highlighting the scant representation
Recent major corporate scandals such as Enron have turned of women, despite women making up half of the potential
public attention to the composition of corporate boards of employee, customer and other stakeholder bases (Catalyst,
directors who are responsible for firm governance. One 2004; Daily et al., 1999; Singh et al., 2007). New governance

* Corresponding author. Present address: Visiting Research Fellow, Max Planck Institute of Economics; Entrepreneurship, Growth & Public
Policy, Kahlaische Straße 10, D-07745 Jena, Germany. Tel.: +61 7 3864 1105; fax: +61 7 3864 1299.
E-mail addresses: [email protected] (V. Singh), [email protected] (S. Terjesen), [email protected]
(S. Vinnicombe).
à
Dual appointment.
1
Tel.: +44 0 1234 751122; fax: +44 0 1234 751806.

0263-2373/$ - see front matter ª 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.emj.2007.10.002
Newly appointed directors in the boardroom 49

guidelines following the Cadbury Report (Cadbury, 1999) present our empirical results. We conclude with a discussion
and the Higgs Review (Higgs, 2003) in the UK called atten- of the contribution of the paper, some limitations,
tion to the importance of diversity, including gender diver- suggestions for further research and implications for
sity, and the need to select directors from a wider talent practice.
pool.
Surveys of chief executives and chairmen in several
countries in the 1990s reveal that women are generally per-
Diversity on corporate boards
ceived to lack the qualifications and experience required
Large corporate boards in the US, UK and elsewhere have
from directors (Ragins et al., 1998; Catalyst/Opportunity
traditionally been composed almost entirely of males from
Now, 2000). Women often report anecdotally that they have
similar backgrounds, forming an ‘‘old boys club’’ in and
to be twice as good as the men (e.g. American Novelist Fan-
across the boardrooms of the private sector (Howe and
nie Hurst’s famous quote, ‘‘A woman has to be twice as
McRae, 1991; Fondas and Sassalos, 2000). However, follow-
good as a man to go half as far’’ (Quotedb, 2006), and
ing a wave of scandals, new governance codes (in the US,
unpublished quotes from our own studies; a female divi-
the Sarbanes-Oxley Act and in the UK, the Combined Code)
sional board director of a FTSE 100 telecommunications
emerged, concerning the structures and processes of com-
firms commented: ‘‘If I had been a man, I would be on
pany boards and the roles and responsibilities of indepen-
the main board now’’, and a female engineering director
dent directors (Aguilera, 2005). In the UK, there is strong
shared, ‘‘I’ve always had a feeling that you have to be much
concern about the continuing strength and privilege of the
better and more committed to be there as a woman.’’). Fe-
‘old boys club’ across FTSE 100 firms, in relation to director
males aspiring to corporate boards therefore may be driven
appointments. The vast majority of non-executive director
to acquire more extensive human capital than their male
(NED) appointments were made without formal advertise-
counterparts in order to overcome ‘glass ceiling’ barriers
ment, application or interviews. Hence the Higgs Review
and to attract the attention of director selectors. However,
(2003) into the role of non-executive directors (NEDs; also
the interrupted nature of women’s careers disadvantages
referred to as ‘outside directors’) and the subsequent Tyson
women’s human capital acquisition in terms of fewer
Report (Tyson, 2003) called for greater transparency in
chances to gain new job skills, management and work expe-
director appointments and strongly recommended increased
rience (Van Velsor and Hughes, 1990).
diversity in the pools of talent from which directors are
The contribution of this paper is to examine the human
recruited.
capital of newly appointed directors in the UK and to estab-
Diversity can take any number of forms, including per-
lish that women directors do bring considerable and diverse
sonal demographics such as gender, race, ethnicity and
human capital to their boards. We examine board human
nationality (Erhardt et al., 2003). Diversity brings a number
capital in an extreme gendered context, the UK’s FTSE
of benefits to boards, including new ideas and better com-
1002 firms, where the long-standing privilege of the old
munication (Milliken and Martins, 1996), debate (Fondas
boy’s network of directors stands in range of the new calls
and Sassalos, 2000; Pearce and Zahra, 1991) and corporate
for diversity in corporate governance. This paper argues
governance processes. Women display transformational
that just as human capital theory is useful in describing
leadership styles (Rosener, 1990) and female board direc-
why women have historically been absent from the board-
tors bring knowledge of female market segmentation (Daily
room, given the views traditionally held by chief executives
et al., 1999). Female board members also serve as role
and chairmen (whether or not the women lacked human
models for younger women and symbolise career possibili-
capital in reality), this theory is relevant in explaining re-
ties to prospective recruits (Bilimoria, 2000). Roberts
cent appointments of new female as well as new male direc-
et al. (2005) report that non-executive directors value the
tors. Furthermore, as previous studies examined the human
openness and the interplay of different perspectives and
capital of entire boards or of existing directors and as turn-
skills that diversity brought to the board. This business case
over of directors is a fairly slow process, we have little
leads us to expect that more diverse candidates would be
knowledge about the human capital introduced by new
welcomed onto corporate boards.
appointments.
However, women possess few insider director seats. As
This paper uses human capital theory to evaluate the
Table 1 indicates, the number of female directors on FTSE
profiles of 144 new men and women appointees to FTSE
100 boards has increased considerably over the past six
100 corporate boards from 2001–4, and explores gender dif-
years, other than as ‘insider’ executive directors, where
ferences (here referring to biological sex). In contrast to
women hold just 3.4% of seats. Women accounted for
earlier studies (e.g. Hillman et al., 2002), we provide a re-
10.4% of all directors and 13% of all new appointments in
cent profile of new directors and in a unique country envi-
2006 (Authors, 2006).
ronment, the UK. This paper proceeds as follows. First,
we highlight the increasing interest in director diversity,
and review the extant literature on human capital of direc- Human capital of directors
tors of corporate boards. Based on human capital theory we
suggest five hypotheses to be examined, drawing on previ- Human capital theory (Becker, 1964) provides a convenient
ous work that indicates where gender differences are basis for understanding inequalities, and we apply it here to
likely. We then describe our sample and methods, and explain the continued exclusion of women from corporate
boardrooms. Human capital can be linked with resource
2
Financial Times/London Stock Exchange listing of the largest dependency theory (Pfeffer and Salancik, 1978) which sug-
100 firms by market capitalisation. gests that, given an increasingly uncertain business environ-
50 V. Singh et al.

Table 1 FTSE 100 Directorships and New Appointments

FTSE 100 Directorships 2006 2005 2004 2003 2002 2001
Number of Female-Held Directorships 117 121 110 101 84 75
% of all Directorships 10.4% 10.5% 9.7% 8.6% 7.2% 6.4%
Number of Female Executive Directors 15 14 17 17 15 10
% of all Executive Directorship 3.8% 3.4% 4.1% 3.7% 3.0% 2.0%
Female held Non Executive Directorships 102 107 93 84 69 65
% of all Non-Executive Directorship 13.7% 14.5% 13.1% 11.8% 10.0% 9.6%
Total New Appointments 181 179 141 149 124 128
New Female Appointments 23 30 24 20 13 15
New Male Appointments 158 149 117 129 111 113
Female % of New Appointments 12.7% 16.8% 17.0% 13.4% 10.5% 11.7%

ment, boards should be composed of individuals who can Director Education and Experience
provide access to a breadth of resources. Human capital
theory is concerned with how an individual’s investments A consistent finding in previous research is that female
in education, knowledge, skills and experiences enhance directors have high levels of education (Burgess and Thare-
cognitive and productive capabilities for the benefit of the nou, 2002). Human capital investment in education, and
individual and the firm (Becker, 1964; Westphal and Zajac, particularly advanced education, is a starting point for
1995). Just as with financial capital, investments in human development of independent thinking, a key facet of role
capital produce rents for the individual, often in the form requirements for non-executive directors, according to Rob-
of higher and sustained pay levels and promotion (Tharenou erts et al. (2005). Hillman et al. (2002) comment that
et al., 1994). The rents are cumulative, so that by the time minority groups can gain public and objective credentials
an individual seeks a boardroom appointment, he or she will through education, particularly postgraduate qualifications,
usually have acquired substantial human capital over a num- thereby levelling the playing field and compensating for the
ber of years. effects of any discrimination and subjective bias in selection
As each director brings a unique set of human capital re- and promotion. Educational qualifications are valued by the
sources to the board (Kesner, 1988), those who select new public and employers can then benefit from the expertise
board members may be interested in attracting individuals and credibility of the educational human capital of their
with particular human capital resources to complement staff and directors. An increasing number of women obtain
the board’s existing capabilities. Characteristics of boards higher degrees, with female graduates now outnumbering
of directors receive increased scholarly attention (Johnson their male counterparts in the US, UK and elsewhere (HESA,
et al., 1996), but hitherto, research on directors and those 2003). Becker (1962) suggests that individuals who are more
in the upper echelons has focused on functional, age and able tend to invest more in human capital such as educa-
educational diversity, usually ignoring gender (e.g. Ham- tion. Given that new women directors have successfully bro-
brick and Mason, 1984; Jensen and Zajac, 2004). In an ken through the glass ceiling, they could be said to visibly
increasingly globalised world, international experience pro- represent the more able of their female peers by dint of
vides firms with competitive advantage (Carpenter et al., their top company director appointments. Furthermore, gi-
2001). Other extant research on human capital of board ven that investment in advanced education can compensate
members is limited to a small number of demographic vari- for the effects of discrimination, we expect new women
ables (e.g. Burke, 1997) or to female-only studies (e.g. Bur- directors to report more educational capital than will men.
gess and Tharenou, 2000). A notable exception is Hillman
et al. (2002) who draw on resource dependency theory Hypothesis 1: New women directors will be more likely to
and Hillman et al. (2000) taxonomy of director roles (insid- have higher educational qualifications than
ers, business experts, support specialists and community will new men directors.
influentials) as human capital resources, thereby expanding
the usual binary view of inside and outside director roles. Reputation is associated with human capital derived
They examine patterns of occupational and educational dif- from investments in education and other visible individual
ferences amongst white and African-American men and wo- attributes that stand as proxies for the actual capabilities
men directors on Fortune 500 boards. Their study highlights of the person (Hall et al., 2004). Individuals gaining direc-
the human capital of the whole complement of directors. torships are likely to have acquired reputational capital that
Our study examines the human capital of the most recent signals competence and reduced risk to the beholders who
cohort of newly appointed directors, to identify the human use their social networks to select and appoint new direc-
capital currently being sought and acquired by FTSE 100 tors. A noticeable factor in the profile of female directors
firms. The UK is an extreme and persistent gendered con- in the FTSE 100 since the 1980s is that significantly more wo-
text. From the literature, a number of hypotheses are sug- men than men have titles, whether academic (Dr. or Profes-
gested that will allow us to consider how the human sor), aristocratic (Lady, Honourable), civic (Dame,
capital of the new cohort of women and men directors Baroness), or political (Dame or Baroness), or Lady as con-
may differ. sort title of an honoured man (Howe and McRae, 1991;
Newly appointed directors in the boardroom 51

Authors, 2007). Mattis (2000) also describes a preference in Hypothesis 3a: New women directors will be less likely to
the US for ‘‘branded women’’ directors, including those have previous board experience than will
with a degree from Ivy League universities, which signals new men directors.
upper-class status to senior managers (Zweigenhaft and
Domhoff, 1998). The same could be said for the reputational It is not just human capital acquisition of board experi-
capital value of degrees from Oxford and Cambridge univer- ence that is valued, but board interlock research shows that
sities in the UK, which are well represented in the higher executive experience is most sought in new director
echelons of business and government. appointments, with the expectation of rents for the hiring
Another facet of reputational capital is the extent to board in terms of competitive information and advantage
which directors appear in the press, and in directories of deriving from those executive roles (Pearce and Zahra,
well-known people. As role models, these high profile wo- 1992). Such knowledge and experience contribute to the
men often make speeches or are featured in the press, so board’s strategic role, enhancing the firm’s competitiveness
their names are likely to be picked up by internet search en- and returning value to the shareholders. Given that there
gines such as Google. We would suggest that the scarcity of are so few women in executive director roles such as chief
such women may lead to higher levels of opportunities to executive, chief finance officer and chief operating officer,
engage in role modelling activities and more publicity than with a rise from 2.0% in 2000 to almost 3.4% in 2006 in the
their male peers. proportion of women of all executive directors in FTSE
100 firms, and as women directors tend to be younger on
Hypothesis 2: New women directors will be more likely to average than their male peers by about three years
have higher levels of reputational capital (Authors, 2006), we anticipate that the new women direc-
than will new men directors. tors have not yet acquired as much executive experience
as the new men directors.
Becker (1962) emphasises the importance of on-the-job
experience and training that raise the future productivity Hypothesis 3b: New women directors will be less likely to
of the individual and his Nobel lecture (Becker, 1993) have top management team experience
describes how earlier inequalities in the workplace can be than will new men directors.
explained by human capital theory. Previously, women were
more likely to work part-time or to settle for lower paid but Boards of publicly-traded firms have a stewardship duty
convenient jobs, and hence would be less likely to partici- to appoint candidates who are well qualified for their direc-
pate in on-the-job training for more senior roles, as neither tor roles in order to secure the desired resources for the fu-
they nor their employers would gain a reasonable return on ture of the company and its stakeholders, and to protect
the investment in training. But in recent times, women have and develop firm assets (Aguilera, 2005). Hence all new
invested in education, and adopted a lifetime work pattern directors are expected to have successful and relevant ca-
more similar to that of men. So today’s female labour force reer experiences in their sectors and professions before
are acquiring more senior level experience than did previous their appointment. However, given that women are often
generations, and inequalities such as the gender pay gap are more attracted to public and not-for-profit sector careers,
reducing, albeit slowly. However, very few women have we expect that women directors’ work experience human
reached corporate board level positions in the UK’s FTSE capital would be biased in favour of those sectors, in con-
100 firms. trast to their male peers. We also expect women directors
Research into chief executives’ views on the lack of wo- to have human capital which is different from their male
men directors has, for many years, shown that CEOs believe peers in terms of professional background, with more male
that there are not enough women with appropriate business directors with career experience in traditional ‘‘masculine-
experience (Burke, 1997). This ‘experience-based-bias’ typed sectors’’ where men comprise the majority of those
argument (see Bilimoria and Piderit, 1994) describes wo- employed, such as engineering and science.
men’s under-representation in leadership roles as based on
a perceived lack of experience. Catalyst’s 1995 survey of Hypothesis 4a: New women directors will be more likely to
CEOs of US firms reports that the most frequently cited have previous career experience in the pub-
reasons for women’s low representation on boards are the lic and not-for-profit sectors than will new
small number of women with appropriate business experi- men directors.
ence (stated by 87% of manufacturing CEOs and 78% of ser- Hypothesis 4b: New women directors will be less likely to
vices CEOs) and the view that women have not been in the have previous career experience in the mas-
pipeline long enough (Mattis, 2000). A UK study identifies culine-typed professions than will new men
similar arguments, reporting 40% of CEOs believe that wo- directors.
men had not been in the pipeline long enough, compared
to only 28% of senior women; a fifth of CEOs identify wo- Given recent trends in globalisation and the increasing
men’s lack of significant general management experience numbers of cross-national mergers and acquisitions of many
to be a major barrier (Catalyst/Opportunity Now, 2000). If large corporations, we expect that international experience
board experience is an essential requirement for appoint- will play an increasingly important role as directors are being
ment, then the pool of talent with that particular human asked to monitor, govern and advise on corporate activities
capital is very small, and hence we expect that women in and opportunities across a range of countries and different
this cohort would have less experience than their male national and business cultures. International experience is
peers. regarded as highly developmental as it builds on and inte-
52 V. Singh et al.

grates other related human capital management experience on the basis of biographical details and photographs indicat-
acquired in the home environment. Indeed, Carpenter et al. ing a non-white background, with careful checking from
(2001) suggest that whilst this kind of human capital is rare press cuttings archives and other organisational websites,
even among chief executives, it is particularly valuable for e.g. where individuals were directors or trustees or had
multinational firms where that experience is bundled with made speeches at events identifying themselves as having
other potential resources (such as expanded personal and a non-white background.
work social networks) to contribute to the firm’s competi-
tive advantage. Most FTSE 100 companies have value-added Director Type
activities in several countries and are classified as multina- We recorded whether directors were inside/executive or
tionals. Daily et al. (2000) suggest that having international outside/non-executive.
experience in one’s career portfolio may enhance the likeli-
hood of achieving top executive positions in other compa-
Education
nies, given that there is a positive relationship between
Biographies were examined for evidence of educational
outside CEO successors with international experience and
qualifications, including PhD, MBA, other degrees and
performance. Interviews with forty FTSE 100 chairmen by
accounting qualifications. Note was also taken of degrees
Russell Reynolds (2002) reveal that chairmen value interna-
from elite institutions.
tional experience over gender and ethnic diversity. How-
ever, it may be more difficult or less attractive for women
to acquire this form of human capital. As Traditionally males Nationality
are more internationally geographically mobile than females The nationality of the new directors was recorded in the fol-
(Lyness and Thompson, 1997). Females are often the second- lowing categories: British, US/Canadian, Other European,
ary earners in dual career relationships. Furthermore, inter- and Other. Nationality information is not always provided
national career experience represents a risk with uncertain in biographical data, but again further efforts were made
returns on considerable personal investment (Bolino, 2007). to identify nationality from other sources than the official
Based on the above reasoning, we expect that the new men biographies.
directors would have acquired more human capital in the
form of international experience than will their female peers. Reputation and Status
We captured the following variables: Title, Honour, List-
Hypothesis 5: New women directors will be less likely to ing in Who’s Who and Debrett’s People of Today, Google
have international work experience than will hits by ‘name’ and ‘director’ (three distinct categories
new men directors. emerged: under 50 = low; 50–100 = medium, 100 + = high)
and Oxbridge/Ivy connections (not just degrees). This
Methodology required checking for erroneous items, most of which were
excluded by the introduction of ‘‘director’’ or ‘‘board’’ into
Data gathering the search string. We have not seen other academic
research apply Google hits before, but the major executive
We downloaded the names of FTSE 1003 directors from the search consultancies in the UK increasingly use the number
FAME and Hemscott databases on 1st October 2001, 2002, of search engine references as an indicator of reputation.
2003 and 2004. This data was verified using past surveys of We sought advice from expert search consultants about
boards of directors and information available from the firms’ the breakpoints for high, medium and low categories.
investor relations’ websites. This resulted in a list of 72 new
female board appointees over the four-year period. A random Board Experience
sample of 72 new male appointees out of 470 from the same We recorded experience on other FTSE 100 boards, FTSE
time period was identified using an excel spreadsheet and 101–350 and Minor boards. We also recorded experience
random number generation. We tested to ensure there were on international boards outside the UK.
no significant differences between this sample and the rest of
the population. Using publicly available biographical infor-
Top Management Team Experience
mation from annual reports, Who’s Who, Debrett’s People
The following five variables captured concurrent or past top
of Today and internet searches, we categorised the experi-
management team experience: CEO, CFO, Chief Operating
ence that the new directors brought to their boards. Individ-
Officer (COO) or General Manager (GM) or Managing Director
uals across the four years were treated as one group as there
(MD) experience, Chair experience and Partner experience
were no significant between-year differences.
in consulting, law or accounting firms.

Variables Career Experience

Sectoral experience was categorised as International, Finan-
Demographics cial Institutions, Management Consultancy, Public Sector,
We collected the Age, Gender and Ethnicity data for all Voluntary/Charity Sector, Other Government (membership
respondents. Ethnicity (White or Non-White) was recorded on a government advisory board, executive of a profes-
sional/arts organisation). Professional experience catego-
3
The FTSE index is a ‘moving target’ based on market capital- ries were Accounting, Law, Politics, Engineering, and
ization. On average, 12–15% of FTSE 100 firms turnover per year. Academia. We consider masculine-typed career experience
Newly appointed directors in the boardroom 53

to be in industries where the majority of those employed very highly qualified, with a fifth of the men and a sixth of
are male, e.g. engineering institutions. Feminine-typed ca- the women achieving doctoral qualifications. Interestingly,
reer experience is classified as experience in those indus- a fifth of the women have MBA degrees. Around a third
tries where there is a large female employment base, e.g. of the sample holds accounting qualifications, often not
public sector. reporting a degree. A fifth of the women possess elite de-
grees compared to only a tenth of the men. Our Hypothesis
Director Expertise Profiles 1 that new women appointees would hold higher educa-
We drew on the categorisation of directors’ human capital tional qualifications than men is supported on one important
roles applied in earlier research by Hillman et al. (2000, dimension – the MBA. In our sample, females are signifi-
2002) as the basis for human capital work experience vari- cantly more likely to hold a MBA degree (p < .03).
ables. Two of the authors placed each director into one of Table 2 also shows that the new male directors are
the four Hillman et al. (2000) categories (Insiders, Business slightly more likely to hold a title. However, the new women
Experts, Business Support Specialists and Community Influ- are more likely than the new men to be mentioned in Who’s
entials), and adjusted any disagreements in discussion with Who or Debrett’s People of Today. There are no significant
the third author. It became clear that the business experts differences in Google reputations. Results indicate that fe-
category masked some valuable public sector experience male directors are no more likely than their male peers to
found in that group, particularly of the women. We there- have connections to Oxford or Cambridge or to an Ivy Lea-
fore split that group into two. A fifth category, Business Ex- gue university in the US. The similarities in the reputational
perts AND Community Influentials, was created to capture capital of the new men and women entail that Hypothesis 2
business experts with a ‘portfolio’ career of both business is not supported.
and public experience. We expected women to have less previous board experi-
We examined the differences between male and female ence than their male counterparts. Table 3 reveals that al-
directors. Findings are reported in cross-tabulation tables, most half of the men have previous FTSE 100 director
and with t-tests and chi-square tests for significance. experience, but so did nearly a quarter of the women, and
slightly more women than men have FTSE 101–350 experi-
Results ence. However, women have significantly more minor board
experience than the men, and somewhat more experience
Table 1 reveals that in 2004 and 2005, women take around on international boards. As so many of the new women
17% of all new appointments, much higher than the 10.5% appointees have previous board experience, including on
female representation across all FTSE 100 directorships. FTSE 100 boards, Hypothesis 3a is not supported except
However in 2006, women took only 13% of new appoint- for FTSE 100 experience, which is significant at the
ments. The sample for this study includes all the new p = .006 level.
women and a random sample of the new men appointees Turning to previous top management team experience,
from 2001 to 2004. results indicate that men are somewhat more likely to have
Table 2 reports levels of education as revealed in the experience as a CEO (p = .08) and COO or GM or MD
biographies. This group of recently appointed directors is (p = .013). Hypothesis 3b is therefore weakly supported. In

Table 2 New Director Appointments: Demographics, Education and Reputation

Male (n = 72) Female (n = 72) Chi-square p Value
Ethnicity 98.6% white 95.8% white 0.620 1.029
Nationality 72% UK 61% UK 0.001 17.238
7% USA/Canada 32% USA/Canada
17% Other European 6% Other European
4% Other 1% Other

Education
PhD 21% 16% 0.522 0.410
MBA 7% 19% 0.027 4.911
Other degree 30% 16% 0.074 3.184
Accounting qualifications 30% 35% 0.475 0.511
Elite university degree 12% 21% 0.111 2.535
No information 40% 40%

Reputation
Title 23.6% 18.1% 0.539 0.674
Civic Honour 16.7% 15.3% 1.000 0.052
Who’s Who/Debrett 20.8% 31.9% 0.130 2.288
Google UK mentions 25.0% Low 29.2% Low 0.134 4.027
29.2% Medium 15.3% Medium
45.8% High 55.6% High
Oxbridge/Ivy League connections 20.8% 22.2% 0.839 0.041
54 V. Singh et al.

Table 3 New Director Appointments: Previous Board Experience

Previous Board Experience Male (n = 72) Female (n = 72) Chi-square test of sig p Value
FTSE 100 45.8% 22.2% 0.006 10.303
FTSE 101–350 12.5% 16.7% 0.639 0.895
Minor Board 38.9% 62.5% 0.005 8.029
International Board 36.1% 43.1% 0.444 1.625

Previous Executive Director Experience

Past CEO 41.7% 27.8% 0.080 3.064
Past CFO 26.4% 25.0% 0.849 0.036
Past COO/GM/MD 52.8% 37.5% 0.065 3.393
Past Chair Experience 43.1% 23.6% 0.013 6.125
Partner Experience 6.9% 12.5% 0.261 1.266

addition, new male directors are significantly more likely this was only marginally the case, with 67% of male directors
than females to have experience as chair of a board having this career capital in their portfolio compared to 57%
(p = .013). of their female peers. Only one new male director comes
Table 4 shows a number of significant results regarding from a non-white background (a black South African), com-
previous career experiences. There are sectoral differ- pared to three females (one UK Asian and two African-Amer-
ences, with females significantly more likely to have a back- icans). We find that new male directors are more likely than
ground in management consultancy and the public and female directors to hold British or other European citizen-
voluntary sectors, supporting Hypothesis 4a. There are also ship, and new female directors are more likely to be US or
professional differences, with males significantly more Canadian citizens. New female directors are significantly
likely to report a background in engineering, and females more likely than new males to have non-UK citizenship.
somewhat more likely to have been in financial institutions
and the legal profession. These findings also support Directors’ human capital profiles
Hypothesis 4b. About one in five new directors are accoun-
tants. Norburn (1984) reports that accountants are three We next reviewed the above findings to examine human
times more likely to be promoted to a board than are pro- capital profiles and explore gender differences. For our ana-
duction or manufacturing managers. Women in this sample lytical framework, we drew on the categories developed by
with accounting qualifications find their way onto the top Hillman et al. (2000, 2002) to group the directors by their
corporate boards in a similar proportion to their male peers. human capital work experience. We find that the expertise
Overall, these findings indicate that women are rather more profile of the males and females was significantly different.
likely to have a portfolio of experiences in their career. Consistent with prior research, females were significantly
Hypothesis 5 predicted that women would have less less likely to be Executive Directors, but were no less likely
international experience than women. Table 4 reveals that than males to be business experts. Women were, however,

Table 4 New Director Appointment: Previous Career Experience

Previous Career Experience Male Female Chi-square test Value
(multiple responses allowed) (n = 72) (n = 72) of sig p
Sectors
International 66.7% 56.9% 0.230 1.441
Financial Institutions 31.9% 44.4% 0.123 2.383
Public Sector 18.1% 31.9% 0.054 3.704
Voluntary & Charity Sector 13.9% 22.2% 0.194 1.690
Other Government 13.9% 23.6% 0.135 2.234
Management Consultancy 13.9% 27.8% 0.040 4.211

Profession
Accountant 20.8% 19.4% 0.586 1.070
Lawyer 6.9% 15.3% 0.112 2.531
Politician 4.2% 11.1% 0.117 2.461
Engineer 22.2% 2.9% 0.001 12.444
Scientist 11.1% 7.1% 0.245 1.351
Academia 5.6% 12.5% 0.244 2.114
Portfolio Career 27.8 41.7 0.080 3.064
Newly appointed directors in the boardroom 55

more likely to be business support specialists. More women It is interesting that two thirds of males and well over
than men fell into the community influential category, and half of the females in this study report international experi-
over a quarter of the women in the business expert category ence, and many women and men sat on boards in other
were additionally community influentials. See Table 5. countries. In 1984, Norburn reported that 65% of British
executive directors had never worked outside the UK, and
only half of them thought that an overseas posting would
Discussion be useful to further their career. Our cohort of directors
represents diversity in terms of nationality, international
Human capital theory leads us to expect that directors’ work experience and board experience, supporting the com-
appointments are based, in part, on the human capital ments made by chairmen in the Russell Reynolds (2002)
(knowledge, skills, experience) they can provide to the study that international diversity is very important in adding
firms. Women have been present in the full-time workforce value to the board. Indeed, the women bring considerably
for many years. So why are women absent from a quarter of different international diversity to their male peers. Women
FTSE 100 boardrooms and in token numbers in most of the directors’ human capital symbolises an outward-looking and
others? Have women failed to accumulate sufficient rele- international capability of FTSE 100 boards.
vant human capital? What role does human capital play in We found the Hillman et al. (2000) taxonomy of four cat-
selection an appointment? Previous research reports that egories of directors (business experts, business support spe-
chief executives and chairmen want women board members cialists, community influentials and insiders) to be a useful
with prior board experience (Mattis, 2000), but there is still way of examining director’s biographies for evidence of hu-
a perception that women with the ‘right’ experience are man capital, but the category of business experts masks the
hard to find (Russell Reynolds, 2002). additional diversity that some female directors bring to the
Our findings belie some of the myths about female direc- boardroom in terms of significant experience from more
tors not having sufficient experience, although female than one major domain. We find that female business ex-
directors appear to have spent time on a wider variety of perts are more likely than their male counterparts to have
boards than have their male peers. A somewhat unexpected both business and community expertise. If we had kept
finding is that almost a quarter of new female directors ap- the four category taxonomy, our business experts group
pointed between 2001 and 2004 already have FTSE 100 would contain 54% of the males (compared to 89% found
board experience. These women served on top boards be- by Hillman et al., 2002), and 49% of the females (compared
fore retiring and then gaining appointments to different to 35% found by Hillman et al., 2002). The women in the
FTSE 100 boards, or acquiring concurrent directorships, as FTSE 100 study have more large corporate business exper-
do five women (but only one man) in this sample. As the tise than the Fortune 1000 women in the Hillman et al.
Higgs Review (2003) recommended that directors should (2002) study. This evidence refutes the view that women
not serve for more than two terms, there may be increased lack the ‘right’ human capital for directorships – women
director turnover. Hence, it is likely that the ‘recycling’ of a directors’ balance of human capital assets may be different
small group of experienced directors will become a regular from the traditional male accumulation of knowledge, skills
feature of female directorships as is the case for men. As and experience, but that is the added value of diversity on
women are more likely than men to have experience on corporate boards.
FTSE 101–350 and minor boards, smaller boards constitute Another interesting finding is that female inside directors
an incubator talent pool for female FTSE 100 directors. may also play a part in public sector bodies, as is the case of
Almost half of the women have previous experience in the HR director of Whitbread sitting on the UK government’s
financial institutions, a third have experience of senior posi- Low Pay Commission. It would be useful to explore, in a lar-
tions in the public sector, and nearly a quarter have volun- ger sample, whether the Insider category might be split into
tary and charity organisations leadership experience. Many two: Insiders and Insiders with Public Sector Experience.
sat on government advisory bodies, and boards of arts and Directors falling into this second category should be very
other organisations. These profiles follow Higgs’ recommen- attractive to those seeking future outside directors. If there
dation that boards extend the talent pool for board appoint- are gender differences, is it the result of women managing
ments beyond directors with FTSE 100 experience. their career portfolios, or are women inside directors

Table 5 New Director Appointments: Expertise Profiles

Expertise Profiles Male (n = 72) Female (n = 72) Chi-square test of sig p Value
Business Experts 54.2% 48.6% .738 .251

Comprised of:
Business Experts with Community Influential Expertise 18.1% 26.4% .316 1.446
Business Experts, no Community Expertise Listed 36.1% 22.2% .281 1.584
Business Support Specialists 8.3% 20.8% .057 4.516
Community Influentials 4.2% 11.1% .208 .117
Executive (Inside) Directors 33.3% 19.4% .088 3.575
56 V. Singh et al.

offered more opportunities by government agencies as This study shows that this new cohort of women directors
scarce resources for public service? has accumulated human capital fairly similar to their male
We acknowledge several limitations of our study. First, peers in terms of education, reputation, board experience
we gathered data only from publicly available information. and career experience, albeit at a slightly younger age to
Self-reports of directors’ experience would be more reveal- the men. Importantly, in capturing the return on their
ing, but are difficult to obtain from a complete set of 144 investments by gaining their directorships, these women
individuals. Hence we opted for public biographies that var- are then in a position to contribute the benefits of their
ied in information quality, supplementing our data from higher levels of international diversity, public sector, gov-
other public sources. Second, there is researcher-induced ernment board and major management consulting firm
bias from coding structures and decisions. Our categoriza- experience. Hence if this female cohort’s human capital is
tion of the director roles masks large differences in experi- typical of new directors for the next decade, then increas-
ence, for example, in the business expert category, where ing the number and proportion of women in the boardroom
some directors have been chairman and/or chief executives will provide the potential for a more diverse set of human
of similar large firms, whilst others have sat as non-executive capital experiences to be utilised by top firms.
directors in a more advisory role, and sometimes only on one A number of avenues are suggested for further research.
corporate board rather than on several boards. Third, our An investigation into the director appointment process
study uses new directors as the base unit of analysis, but could reveal what type of human capital is most likely to re-
one man and five women were appointed to multiple boards, sult in an invitation to board membership. Such information
resulting in an over-sampling of those individuals. Fourth, would be useful in preparing senior executives for future
there may be bias due to the random sampling of the male board positions. Other directions could include an examina-
cohort studied; however we did not identify any significant tion of the legitimizing processes of access to boards. Fu-
differences between our sample and the rest of the popula- ture researchers might also consider a broader study
tion of new male directors. Fifth, our study is limited to examining differences in human capital profiles between
directors and human capital in large, publicly-traded firms new appointees and the existing board, to identify more
listed on the London Stock Exchange. Finally, in revealing specifically how the new director’s human capital comple-
the human capital of these directors, we have not identified ments that of the whole board. A qualitative study of newly
the value of the various aspects of that capital to the board. appointed directors could reveal how directors draw on pre-
vious experience in the various sectors to make a contribu-
tion to board performance during the first term of
Conclusion directorship. In addition, it would be interesting to obtain
the views of chairmen and other board members about
Drawing on human capital theory, this paper explores
the relative usefulness of the various human capital re-
whether the human capital of new directors differs by gen-
sources of incoming directors once they have been inte-
der, in the context of the frequently reported view that wo-
grated into the board. A study exploring the links between
men do not have the right kind of skills and experience for
diversity (or change in diversity) and performance in differ-
directorships of large companies. Evidence from this study
ent environments would enable a better understanding of
suggests otherwise: in general, new women directors have
the institutions of corporate governance. As this study pro-
fairly similar and sometimes additional human capital to
vides a baseline with the human capital of the cohort from
their male peers.
2001-4, future studies could monitor changes over time with
The contribution of this study is fivefold. First, it exam-
new cohorts of directors. Finally, our results could be repli-
ines the human capital of newly appointed directors, rather
cated in other country environments.
than of existing directors with a variety of tenure. Second,
Our findings suggest that individuals seeking board posi-
it provides empirical evidence that human capital theory
tions need to identify what human capital resources they re-
has credence in explaining why this particular cohort of wo-
quire in order to be considered for director appointments,
men has been appointed. We find that new board appoin-
and to manage their careers so as to build an appropriate
tees in the top 100 UK companies from 2001–2004 possess
portfolio of experiences, knowledge and skills. Those who
a rich diversity of previous experience. Third, we identify
mentor aspiring directors can also benefit from these find-
that, compared to men directors, women directors bring a
ings. There are also implications for board nomination com-
very different international profile to their boards. Fourth,
mittees and search consultants tasked with identifying
we show that the Hillman et al. (2000, 2002) taxonomy
appropriate talent for new directorships, recognising the
can mask the added value of human capital from women
variety of backgrounds that other boards have found attrac-
who have experience as business experts both in large for-
tive. If the Higgs Review recommendations for increased
profit firms and the public sector, and hence we suggest a
diversity are taken into account, then the fact that the
five category taxonomy to capture this important element.
women directors in this study have such a wealth of experi-
Finally, this paper provides a new UK perspective on this is- ences should augur well for women’s future access to the
sue, important because of the strength and privilege of the
boardroom.
‘old boys culture’ and the current pressures for diversity.
Challenging the myth that women do not have the right
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58 V. Singh et al.

Dr. VAL SINGH is a Reader in Corporate SUSAN VINNICOMBE is Director of the CWBL
Diversity Management at Cranfield School of at Cranfield where she researches women’s
Management, where she is also Deputy leadership styles, the issues involved in
Director of the International Centre for women developing their managerial careers
Women Business Leaders. She is Gender and gender diversity on corporate boards.
Editor of The Journal of Business Ethics and She has written eight books and numerous
Associate Editor of Gender, Work & Organi- articles. Professor Vinnicombe runs custo-
zation. Current research examines diversity mised programmes for women executives,
on FTSE 100 boards, gendered boardroom which have won three national awards. She
cultures, senior women’s careers, impres- was awarded an OBE for her Services to
sion management, work/life balance and role models. She has many Diversity in the Queen’s New Year’s Honour List in 2004, and is Vice
academic and practitioner journal articles, and has presented her Patron of Working Families.
work in 15 countries.

Dr. SIRI TERJESEN is also a Visiting Research

Fellow at the Max Planck Institute of Eco-
nomics in Jena, Germany, and a Lecturer at
the London School of Economics and Politi-
cal Science’s summer school. She has pub-
lished in journals including Strategic
Management Journal, Small Business Eco-
nomics, Journal of Business Ethics and
Entrepreneurship Theory & Practice and is
co-author (with Anne Huff, Steve Floyd and
Hugh Sherman) of Strategic Management: Thought and Action
(Wiley, 2008). She is on the board of NPRC.