The cascade effect of women on boards: How firm-level gender diversity management develops intellectual capital

Building on the resource-based view and human capital theory, this paper extends the effects of gender diversity from the board level to the entire organizational level and investigates the impact of diversity and inclusion management practices on a firm’s intellectual capital performance. Conceptually, we adopt the Value Added Intellectual Coefficient (VAIC) construct and disentangle intellectual capital into its threefold dimensions of human capital, structural capital and physical capital. Specifically, we explore the effects of three categories of formalized gender diversity management practices - namely recruitment, retention, and training and development -, while also considering the supporting role of governance structures and organizational infrastructures as a driver of the overall efficiency and value of intellectual capital. We analyze a sample of 72 firm-year observations associated with 36 Italian companies listed on the Stoxx Italy-45 in the 2018-2019 period and ran multiple linear regression models. The paper provides evidence that a firm’s specific bundle of diversity management practices positively influences intellectual capital performance. By taking a nuanced perspective, we also shed light on how various intellectual capital components are affected differently by varying diversity management practices. This study enhances our understanding of how gender diversity management practices can affect a firm’s intellectual capital, shedding light on the potential benefits of implementing formalized diversity and inclusion initiatives at multiple levels, spreading from boards to the entire organization.