Diversity begets diversity? The effects of board composition on the appointment and success of women CEOs

• We analyze the effect of board composition on the appointment/success of women CEOs.
• Influential women directors increase the odds that a woman will be appointed CEO.
• The number of women on the board does not influence the appointment of women CEOs.
• Firms led by women CEOs perform better when there are multiple women on the board.
• Influential directors do not influence firm performance in firms led by women CEOs.

Previous research on the effects of leadership diversity on firm outcomes has produced inconsistent and inconclusive findings. While some scholars argue that diversity increases organizational equity and enhances performance, others argue that diversity increases conflict, reduces cooperation and harms performance. This study tests the impact of a variety of compositional factors on firm outcomes. Specifically, we analyze whether and how board composition affects the advancement and mobility of women CEOs and firm performance. Our analysis relies on a unique data set of all Chief Executive Officers (CEOs) and Board of Directors (BODs) in Fortune 500 companies over a ten-year period. We find a marginally significant positive relationship between board diversity and the likelihood of a woman being appointed CEO. We further find that board diversity significantly and positively influences the post-promotion success of women CEOs. Our findings suggest that board composition is critical for the appointment and success of women CEOs, and increasing board diversity should be central to any organizational diversity efforts.