Boards and the Selection Procedures Post Gender Quotas

Purpose: Director Selection process can greatly effect board’s behavior and effectiveness and ultimately the firm’s performance and outcome. Director selection practices are hence important and yet underresearched topic, especially practices applied in the wake of gender quota legislations. The purpose of this paper is to contribute to the extant literature by gaining greater understanding into how new female board members are recruited and selected when demand for one gender is high. Design/methodology/approach: Mixed research methodology was applied. Questionnaire (N=260) and in-depth interviews (N=20) were conducted with Icelandic non-executive board directors, to identify the selection criteria that are deemed most important when selecting the new female director candidates taking seat on boards in the wake of gender quota legislation and compare those practices with previous selection practices of pre-existing board directors. Findings: Findings show that not all boards fulfil the selection tasks of drawing up appropriate requirement profiles or rationally structuring the selection process, but rather rely on single person (most often specific shareholders, CEO and Chairman of the board) decisions with limited transparency or analysis of needs. Board and director “fit” were therefore often under analyzed. The study further shows clear focus on surface level diversity (e.g. gender, age, education) but lack of adequately assessing “deep level” diversity (e.g. values, attitudes, etc.). The findings further indicate that appointments to the board are based on identifying in the individual both some preferred hard skills (general management experience, policy making experience, and finance experience) and preferred soft skills (communication skills, independent decision making, strong moral sense), though assessment methods applied were severely limited.