Beyond The Glass Ceiling : Informal Gender-Based Status Hierarchy and Corporate Misconduct

We draw insights from the status characteristic theory and conjecture that status beliefs lead to the formation of an informal gender-based status hierarchy on the boards. After controlling for several directors’ characteristics, we identify that the status ranking of female directors is remarkably 19.58% of one position lower than that of male directors on the boards. We show how this discrimination affects the board's decisions, and in particular corporate ethical behaviors. Specifically, we argue that the less negatively a board is biased toward the female gender in its status-based ranking, the lower the likelihood of corporate misconduct will be. We further argue that the effect of informal gender-based status ranking is contingent on three factors, namely, female board chair, good governance mechanisms, and Confucian culture. By using a large firm–year (18,266) and director–year (285,229) sample of Chinese firms during 2008–2019, we find consistent evidence in support of our theoretical predictions