EURO 2018, Valencia, Spain, 8 - 11 July 2018, pp.308
Sustainability has become an important determinant of competitive advantage.
Firms are expected to demonstrate environmental and social
outcomes. Boards of directors and top management teams (TMTs) are
the ultimate decision-making units responsible for meeting the needs
of stakeholders. This paper investigates female representation and gender
diversity on boards and TMTs and firm sustainability performance.
The main issue addressed is whether female representation and gender
diversity on boards and TMTs impacts the firm’s ability to meet sustainability
index requirements. Group diversity and critical mass literature
provide the theoretical background. Group diversity literature
suggests that diversity in attributes such as gender results in greater
variety of ideas, perspectives, knowledge, creativity and innovation
in turn competitive advantage. Research on critical mass argues that
women representation on boards needs to reach a critical mass level before
it can aect decision-making process and firm performance.This
study hypothesizes that 1)as gender diversity on the board and TMT
increases so too does the firm’s sustainability performance and 2)the
number of females on the upper echelons (board and TMT) has a positive
relationship with sustainability performance. To test the hypotheses,
binary regression was conducted. The sample consists of top 100
best performing companies in the Istanbul stock exchange. The results
provide support for the hypotheses.