Breaking the Barriers of Corporate Law : Unleashing the Power of Board Gender Diversity through Organizational Transformation

In recent years, there has been a growing recognition of the significance of board gender diversity in corporate law and governance. This increased awareness can largely be attributed to the active engagement of social movements and advocacy groups, with the #MeToo movement playing a pivotal role in driving progress. Originating in 2006 and gaining momentum in 2017, #MeToo brought widespread attention to the issues of sexual harassment and gender inequality, emphasizing the urgent need for greater representation of women in positions of power, including corporate boards. Additionally, institutional investors played a crucial role in promoting board gender diversity by exerting pressure on listed companies. Moreover, lawmakers have implemented regulatory measures, such as voluntary targets and disclosure obligations within a "comply or explain" framework, as well as strict enforcement of mandatory quotas, to enhance board diversity. However, the empirical evidence regarding the effectiveness of these measures in generating shareholder value or advancing democratic principles remains inconclusive and varies. This Article breaks new ground in the literature by uncovering a critical factor that policymakers have often overlooked in their design of corporate laws to promote board gender diversity: the organization itself. A variety of organizational decision-making and internal communication structures can have an impact on the level of diversity within organizations, resulting in different degrees of inclusiveness. Additionally, these organizational structures play a crucial role in determining the effectiveness of regulatory measures aimed at promoting diversity at the board level. For instance, hierarchical organizational structures tend to restrict the participation and influence of individuals from diverse backgrounds, potentially resulting in reduced efficacy of the rules aimed at increasing board diversity. On the other hand, decentralized decision-making arrangements that incorporate diverse perspectives and experiences are more likely to support an inclusive work environment, thus reinforcing the effectiveness of these rules for enhancing board gender diversity. Therefore, this Article underscores the pivotal role corporate law may have in cultivating an organizational culture that embraces regulatory measures aimed at promoting gender diversity on corporate boards. By doing so, it can unlock the benefits associated with diverse boards